The dangers of dynamic currency conversion

burning dollarProcessing a credit card charge for overseas purchases used to be pretty simple. You swiped your card while on vacation, your bank changed the money from pesos or euros into greenbacks, and the amount you’d spent appeared on your bill. Maybe you paid a small conversion fee, but you also got a competitive exchange rate.

Not anymore. Just ask Jae Cuadra, who recently tried to buy a round-trip train ticket between the Swiss cities of Interlaken and Lauterbrunnen. The purchase, at a train station in Interlaken, went on his Capital One Visa card, which doesn’t charge to convert foreign currencies. But “for the first time, I was offered a choice,” says Cuadra, a registered nurse from Westbury, N.Y. “Did I want to pay in dollars or Swiss francs?”
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Should airlines be allowed to trade slots?

Whose slots are they, anyway?

That’s a fair question, given airlines’ recent efforts to swap slots – government permission to take off and land at a particular time – in Washington and New York.

You may not realize it, but slots can affect how much you pay for a flight. And the decisions made about landing permissions are hardly abstract. They will almost certainly have a lasting effect on competition and airfares, experts predict.

Catching a plane from a slot-controlled airport can be pricey. Fliers from Washington’s slot-limited Reagan National Airport paid an average fare of $373 for the first quarter of 2010, the latest period for which figures are available. At slot-restricted Liberty International Airport in Newark, N.J., the average fare was $423. By comparison, the average domestic airfare was just $328.

The reason? Slots – specifically a lack of them – drive airfares higher because competition is capped.
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