Running "bundle install" today gave me...
ArgumentError: invalid byte sequence in US-ASCII
Normally I use Terminal.app but I recently switched to iTerm as I'm finding it is quite a bit faster, so this little issue caught me out. iTerm doesn't enable UTF-8 by default.
Adding this to ~/.bash_profile will set it no matter what terminal app you're using.
export LANG=en_US.UTF-8
export LC_ALL=en_US.UTF-8