A new article by Eliott McLaughlin (CNN) titled “Conquer the currency conversion conundrum” quotes Tim Jarrell, publisher of Fodor’s Travel, with some pretty strong words against Dynamic Currency Conversion. Consensus seems to be building among travel advisers that DCC does not favor the consumer. However, CNN’s latest article on the subject is perplexing at best. Here’s what McLaughlin writes about DCC:

There is little benefit to using dollars abroad. If lost or stolen, they’re gone for good. What’s more, you could fall prey to dynamic currency conversion, when a merchant offers to convert the price of your purchase from the local currency into dollars.

It’s billed as a service, Jarrell said, but “you get hit in ways you have no idea you’re being hit.”

You can get downright unfriendly exchange rates, and the merchant sometimes charges an additional fee for the “service.”

“When in doubt, pay in the local currency,” Jarrell said.

Confusingly, this section about dynamic currency conversion is written under the subtitle “Cash.” Although, merchants can most certainly accept cold hard US cash rather than the local currency in exchange for a product, the DCC “service” most often refers to the dynamic transaction fee merchants can apply when purchases are made with a credit card (see article about DCC). The “service” aspect of this transaction is facilitated by the individual merchant and the credit card merchant services provider that the merchant is using. When using US cash to make a foreign purchase, the transaction is usually between you and merchant. The merchant may set the exchange rate using a “dynamic” method, but can also set it arbitrarily. It wouldn’t hurt for CNN to clarify this aspect of the article.