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Comment by codefreakxff | Hacker News Reader

So… you’re saying it’s a sensationalized headline because 95% could cover it “somehow”? I think the missed point here is that while 65% have savings, there are 35% on the brink of financial disaster. I guess having to ask your family to help cover a $1000 bill does mean it got paid, but living under such conditions is exhausting.

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>there are 35% on the brink of financial disaster.

This seems like a caricature of the opinion of someone who grew up in the Great Depression and never accepted credit cards as legitimate tools.

Saving money from your first good job until you had several months worth of salary was traditional advice, like, in the 1950s.

In the Depression, my grandparents raised rabbits on the farm for food! Should we be concerned that the average person doesn't have any rabbits in reserve and is therefore on the brink of starving to death?

I'm.. not even sure how to respond to this.

I'll just address the underlying sentiment that credit card debt is just fine and totally normal.

It's really a question of poverty vs convenience. If I use my credit card because it is convenient and I can pay off my bills, great. No problem. But if I am so poor that I have no choice but to put everything on a credit card, then every purchase is 10%, 20%, or even 30% more expensive - heck, it might be 3000% more expensive because there are many people who are making minimal payments just to get by every month.

So, no, you silly analogy about your grandparents is not what we are talking about here. We are talking about people right now, today, who are living paycheck to paycheck, not sure how they are going to pay for food and for the medical care they need, and making really hard choices. And your mockery is inappropriate.

>I'll just address the underlying sentiment that credit card debt is just fine and totally normal.

I think your point that a credit card can't save someone that consistently spends more than they earn is correct.

Neither will a few thousand dollars in cash.

I don't believe 60% of Americans are in this category anyway. I don't think anyone seriously does believe it. Do you?

What we are talking about, in my view, is whether having substantial cash reserves has any relationship to risk of imminent financial disaster. Or if it's a weird anachronism.

Not sure where you got 60% from. I said 65% of people had the money, and 35% of people did not. Is that accurate? The number comes from my interpretation of this one study. I would put some confidence in the number being between 25-35%. Again, 60% is a made up number - so no, I don't agree with that number.

Inflation is balooning. Even before the recent large expansion of the money supply, holding cash is a losing proposition. Makes way more sense for emergency expenses to go on credit while you liquidate assets, rather than having cash sitting around waiting to get obliterated via invisible redistribution.

I read this more as "lots of rational Americans have the collateral or access to collateral for a loan, and some subset of those can afford to get obliterated by inflation by holding large sums of USD."

As I pointed out to another commenter, this is NOT about wealthy people worrying about how to best utilize their cash. These people are probably the 50% who are not on the verge of financial collapse.

The concern I am bringing up is the people who have NO cash. Marginal credit. Have to figure out how to pay for food and medical care every week and are stressed out. The system is not working for about half of Americans

Your concern is that people have to compensate the farmers who provide the food and the medical workers that provide their healthcare? 50th percentile household wealth (you cite half of america) is over $100k. Cry me a river for those people having to actually put their boots on to fulfill their obligations. They have the $1k, just might be tied up in assets, but they might cry you a sob story that they don't.

I'd include a lot of the cc crowd as well. I have a relatively large CC balance only because I almost always get >15% returns (my cc rate) in the market.

Every once in a while I roll it over to a personal loan but if you are good at investing there's no worry about 15% interest when your main trading account is up 30%+ YoY.

I can't imagine that many people are able to maintain 30% growth over and extended timeline.

You'd rather gamble on >=15% returns rather than just pay off that debt and get an immediate 15% savings? That may work in the short term but bull markets don't last forever.

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