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Comment by F2hP18Foam | Hacker News Reader

On the one hand seems convenient, but on the other, I'm not a fan of tech that lowers the friction between my money and my pocket.

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Let’s go back to mailing personal checks to shareware companies

Don't forget to mail them the floppies to load up and send back :-)

That friction could use some lubrication, at least in Europe. I loathe outdated/misconfigured card payment terminals outright declining payments that go over the 100€ cumulative total on contactless. The better configured ones just ask for a PIN and that's it. But there are many which just decline the transaction, leaving both me and the shopkeeper frustrated requiring me to "try again".

Contactless in the UK lets you use the card five times before you have to Chip&Pin and too reset.

Pointless and all is displayed is "Declined". Embarrassing if your paying in the party.

That's not my experience, it lasts many more times for me and it says "INSERT CARD". Which is also what it says when you haven't got money to cover the payment.

Yeah, I think it's based on an amount instead of times. I have been to my local shop for months and they never asked for card yet. Each time spending like £3-4

I think this would add friction on the whole, adding an authentication step to transactions where you currently just type in your card number and hit submit. It reduces friction compared to an alternative where you confirm transactions with SMS codes, but I don't think that is very common.

It's mandatory in the EU since PSD2 to have an extra validation step like authorising in the bank's app or via SMS.

What are you going to use the money for, if not spend it on something?

Are you going to make a pile of gold and sit on it like a dragon?

Some people like to save and invest instead of spending every single cent they have.

We'd be a much more stable society if the majority of the population wasn't one paycheck away from being financially ruined.

37% of Americans don't have enough savings to cover a $400 emergency[0]. That percentage goes up as the amount goes up and a $400 emergency is easy to hit - medical bill, moving expense, car repair, etc. It becomes 68% at $1,000[1].

[0]https://fortune.com/2023/05/23/inflation-economy-consumer-fi... [1]https://fortune.com/recommends/banking/57-percent-of-america...

Saving money is basically buying into the baning industry’s narrative of a fat bank account, or of borrowing money in order to pay it off for 30 years.

Now investing is another story! Buy durable things with your cash that hold value over time!

Those studies are horribly misinterpreted. Look at the original data, it includes using a credit card as not having the money...

That still counts in my book. If you have to borrow money then you don't actually have it.

Right, because people don't use credit cards for the additional protection, points or miles. It's because they are all borrowing money they don't have.

And billionares who borrow money because it's tax efficient must all be secretly broke too. /s

> Right, because people don't use credit cards for the additional protection, points or miles.

I actually don't know, because I'm not American. Over here just having a credit card draws questions about one's financial stability and responsibility.

At the end of the day it's really not your money you're spending like that. I mean - it's in the name even. You'll have to pay it back eventually.

> actually don't know, because I'm not American.

Neither am I.

> At the end of the day it's really not your money you're spending like that. I mean - it's in the name even. You'll have to pay it back eventually.

Eventually in this case is in less than 50 days. In the 15 or so years that I've been using credit cards, I have never once failed to pay off the bill in full before the due date. And the miles and points I've accrued have saved me significant amount of money.

> Over here just having a credit card draws questions about one's financial stability and responsibility.

I am really curious to know where in the world that is. Even if that is the general perception, it is unlikely to be actually true. Even in Germany, the rich use credit cards at a higher rate than the poor. That is a pattern you'll see replicated the world over. Getting approved for a premium credit card requires one to have a demonstably good income and credit score. So, having such a card is an indicator of strong financial stability and responsibility.

> In the 15 or so years that I've been using credit cards, I have never once failed to pay off the bill in full before the due date

Yeah, but that's you. People living paycheck to paycheck don't have a realistic chance of achieving the same.

> I am really curious to know where in the world that is. Even if that is the general perception, it is unlikely to be actually true.

Poland. Out of 44mln payment cards issued, less than 5mln are credit cards. This is reflected in statistics:

https://www.theglobaleconomy.com/rankings/people_with_credit...

> So, having such a card is an indicator of strong financial stability and responsibility.

Yeah, such a card, not any card. Over here the most popular type of debt is one taken to purchase consumer goods like appliances and electronics in installments, mortgages are second.

Upper-middle class people and higher just buy things cash. There's no benefit in stretching this out if you can afford not to and any, even accidental, delay might hurt one's credit score - not worth it.

The GP's point was that counting someone using credit cards as living paycheck to paycheck is flawed. Especially moreso in a country that had high credit card penetration.

Your contention might be true in Poland. But that most definitely is not universal.

Investments are not very liquid on the time scale of less than a day. It's very often not about having to borrow money, it's about being able to leave less money sitting idle in your bank account.

Saving and investing are not realistic options for you if you're living paycheck to paycheck. That's why it's called that, because you have no money left over after paying for your necessities. Sometimes you don't even get to cover all your bills and you start racking up debt or are forced to be clever with frugality (read: giving up recurring payments like healthcare).

That’s what I ask all the 401k nerds. You could literally die next week. Sure seems like a great way to live; when you’re young and in your prime, live below your means to max out your 401k, which there’s a fair risk you won’t live to see or enjoy, or… just stop hoarding money and live your life (I’m not saying be financially ignorant or irresponsible).

17.27% of men don’t live to age 60, and another ~6%, or 23.57% of men overall, don’t make it to age 65.[1] For reference, one must typically be age 59.5 before they can withdraw from their 401k without penalty.

So, if you save for 40 years, live below your means so you can maybe have a chance at enjoying all that money you’ve socked away. Pretty crazy to think that nearly a quarter of us won’t live to see or use the money beyond 5 or 6 years after retirement.

* [1] - https://www.ssa.gov/oact/STATS/table4c6.html

> www.ssa.gov

Interesting you cite Social Security, the mandatory pyramid scheme that every American pays into and many/most retirees rely on for income. If you die before you retire, you get nothing from Social Security. If you have a 401k and die before using all the money in it, your beneficiaries (the people who inherit your stuff when you die) keep it; nothing like that happens to your Social Security benefits.

> If you die before you retire, you get nothing from Social Security. If you have a 401k and die before using all the money in it, your beneficiaries (the people who inherit your stuff when you die) keep it; nothing like that happens to your Social Security benefits.

Social security has both death and survivors benefits, actually.

"Pay in $10k a year for 40 years, get paid $40k a year for 10 years" isn't a pyramid scheme.

You can go buy life annuities at your will, and they're pretty close in function and clearly not schemes.

As someone who spends quite a bit of his time counting the sand in the hourglass that is one of his relatives' retirement funds...

There's no definite win-strategy here. It is possible to die young. It is possible to outlive your savings and live a miserable final years. We can't guarantee a happy solution.

(Well, TBF, we could decrease the misery of the one option by deeply funding social security, not to sustain it but to raise to a higher standard of living than previous generations ever knew because we currently live in a world with a higher productive capacity than previous generations ever knew. So I'm speaking of transient political reality and not concrete laws of the universe.)

> Well, TBF, we could decrease the misery of the one option by deeply funding social security,

Take from the young (poor) to pay the old (rich). Yeah, that sounds amazing, where do I sign up? /s

Not necessarily. The source of funding for social security was an arbitrary decision. We could fund it with a wealth tax.

> 17.27% of men don’t live to age 60, and another ~6%, or 23.57% of men overall, don’t make it to age 65.[1] For reference, one must typically be age 59.5 before they can withdraw from their 401k without penalty.

You are making the almost certainly mistaken assumption that the population of men who "live below [their] means to max out [their] 401k" are representative of the overall population of American men with regards to life expectancy.

> 17.27% of men don’t live to age 60, and another ~6%, or 23.57% of men overall

The demographics and actuarial numbers of people maxing out their 401k will look very different. The richest live ~15 years longer than the poorest.

There are a few ways you can withdraw from your 401k early without penalty. The best is probably Roth conversion laddering, which requires that you plan your withdrawals 5 years ahead of time. If you have a spouse and children, then it also makes sense to consider what will help you best set them up for a good life; you might not get to benefit much from that savings, but maybe your children will be able to avoid starting their adulthood as debt/rent slaves.

> Are you going to make a pile of gold and sit on it like a dragon?

If you want to buy a house, yes. A pile of gold is also handy to start a business.

I think maybe the focus of GP was on impulse purchases, but more likely it was just a cheeky comment.

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