The number of international travelers is soaring. Many travelers need different currency as they arrive in new countries. In the past, travelers using an ATM, credit or debit card were simply charged for purchases and withdrawals in whatever currency the locals used. For example, U.S. travelers to France were charged in Euros when they used their credit card in Paris.
Recently, instead of being simply charged in the local currency many travelers are being asked if they want to pay in their home currency. Companies offering the service call it “dynamic currency conversion.” For example, some U.S. travelers to France are now asked if they want to complete transactions in dollars.
The change is occurring because ATMs and credit card terminals now have the ability to check where a card was issued. Then international travelers can be asked whether they want to use their home currency for their transactions. The question seems innocuous, but agreeing to use your home currency in a foreign land can inflate the cost of every purchase. Continue reading
The Federal Reserve is expected to lift short-term interest rates at the close of its two-day meeting today and signal that more hikes are to come over the course of the year.
Numerous commentators have focused on who is hurt by rising rates, particularly those with lots of floating rate debt, such as a credit card balance, or anyone in need of a loan.
Not everyone, however, is negatively affected by rising rates. There are some individuals and businesses cheering the Fed on as it pushes up rates, including savers, people traveling abroad and foreign exporters and businesses with large cash balances.
There is a very high chance the Federal Reserve will raise interest rates next week. It would be the first time the Federal Open Monetary Committee (FOMC) – the Fed’s rate-setting team – has lifted its benchmark rate since 2006, beginning the so-called return to normal. Economists, traders and policymakers have been pontificating, prognosticating and placing bets about this decision for a long time, because the impact is expected to be far-reaching.
So how will higher rates affect you? Continue reading