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Comment by wonder_er | Hacker News Reader

The article's claim is almost entirely bullshit. The reasons why are nicely outlined here: https://twitter.com/p_millerd/status/1118071142311288838

This "can't cover a $400 expense" makes for a nice narrative, and we can all insert our perspectives about the world into this narrative, and walk away feeling good about it.

Quotes from the above twitter thread:

> I was curious about this because it seemed low. After some digging I found the 2016 appendix (again, 2017 not to be found). Only 12% of people couldn't actually pay the expense and a smaller amount would have to borrow money (keep in mind this could be double counted)

Another survey question not highlighted actually gives some direct clarity on this question. It turns out only about 15% of people would not be able to cover a $400 expense.

update: clarify uses of "this" and "it".

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For me, having to put it on a credit card is effectively not being able to cover it, so the numbers do check out, from this perspective. Again, we are talking an emergency, not a mortgage.

I think this is one of the reasons it is hard to interpret this data. You view it as effectively not being able to cover it, but I (and possibly a lot of people responding to the survey) view it as a normal mode of operation to put something on a card and pay it off when it is due (and thus pay zero interest).

I keep an emergency fund that is in the tens of thousands of dollars, yet I would cover a $400 emergency in this way - put it on a card and pay it off when due, pulling the cash out of my emergency fund to make the payment. The way the responses are worded makes it hard to get too much meaning out of it.

https://twitter.com/p_millerd/status/1118071182534660096

Response #1 and #3 equal ~80%. I'd count those as being able to cover it.

Many people use credit cards and pay it off in full on time (including me).

Why? That's exactly what credit cards are for. The couple of dollars in interest that you would pick up on a purchase of this scale is peanuts, even if it took you a while to pay it off.

Although I am not sure why you would pay cash for anything if you could use a card (for the same price) instead and get cash back or points.

Except that, in addition to the 41% who can pay in cash (or from their bank account), 39% would put it on their credit card and pay at the end of the month. https://twitter.com/p_millerd/status/1118071182534660096?s=2...

I expect that many of the people who can best afford an unexpected $400 expense would just put it on their credit card which they pay off every month. After all, might as well get the airline miles at least. Even if they could just write a check.

So the 40% is really misleading. It's more like 80%.

> For me, having to put it on a credit card is effectively not being able to cover it,

That may be your personal opinion but that contrasts with both the facts and pushes a narrative that doesn't fit reality. For example, I routinely charge unexpected expenses on a credit card although I am more than capable of easily covering them with my savings. I'm sure thay the sheer convenience of charging expenses on a CC drives the decisions of regular CC users, specially as some CC plans charge 0% interests under some conditions.

Per my other comment [1], that's why such surveys (and, I'll add, their reporting), should sidestep these judgments calls and just find out in what precise sense someone can or can't cover the expense.

In your example, where you are putting something on the CC while already having the cash to cover it, that would count as my category 1, and you don't have to resolve the (irrelevant) question of whether using a credit card "is [inherently] debt".

[1] https://news.ycombinator.com/item?id=19994836

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