The Rachel Cruze Show - Tempting Money Traps That Are Too Good To Be True

Starting point is 00:00:05 So more than ever, I feel like I've seen people really be tempted by zero percent interest loans. And honestly, I get why this is an appealing option, but there are multiple financial offers out there in the world that are too good to be true. So today we're going to talk about five of the most common that I see and steer you in a better direction than the is because they're not great. But first, make sure to subscribe to the channel, share this episode with a friend. All right, number one, the first financial offer that is too good to be true is zero percent interest loans. So 0% yes, I get is very intriguing. But that does not mean that it is free. You are still paying full price for something over the long term.

Starting point is 00:00:44 And in fact, it ends up sometimes being a worse offer because of the stipulations and how strict the repayment options are. So a lot of people get into it because they're like, oh, well, if it ever had interest, I wouldn't be able to afford it in the first place. And then if they find themselves having an emergency, then they don't have the margin to pay the payment. And if that's the case, you guys, sometimes it's crazy what happens, what they do with it. They will upcharge you interest all the way back from when the loan began. They will take your loan, sometimes up the payment in general, what you have to pay for. Some even say, okay, now you owe all of this within 30 days. Like, it is terrible.

Starting point is 00:01:22 It puts you in a really bad system that, again, on the front end seems great. But for a lot of people, it ends up, they get screwed in the process, and it's not good. So I'm not a fan of loans in general, but especially with the zero. So percent, it's, again, very enticing, but when you look into the fine print, not good. Number two is buy now, pay later. So this is just another way to take on debts. And merchandisers know this, and they know how much money you end up spending more when you use buy Now, Pay Later, because you go in to buy, you know, a pair of jeans, you know, $35, $50, $75.

Starting point is 00:01:54 You're like, that's great. And then you divide it up into four installments. It's like, oh, I'm only paying this, you know, $20, 30 bucks. That's not bad. well, if that's all I'm paying right now today, then I can, I was expecting to pay 75, so I'll go and spend more, you know, so that you end up going and spending more. And retailers are making so much more money off of customers because of buy now, pay later. And it is wild how much, again, that they are making. So it is just another form of debt. It causes you to spend more and spreading

Starting point is 00:02:21 your payments over the long haul versus spending in the present. And always, you guys, when you spend in the moment, money you have in real time, not only does it give you, just more peace because you're not using debt, but you also end up spending less. Number three are credit card rewards. So just like the buy now, pay later, you end up spending more when you spend with plastic. And again, the subconscious idea, if you are chasing any level of rewards. And so we find that on average you spend 12 to 18 percent more when using a credit card versus actually your own money.

Starting point is 00:02:54 And so this is a big game. And they are winning. The credit card industry, I mean, it's a billion dollar industry. And they know the psychological games to play. with us as consumers for them to make more money. This is how they make money, you guys. It's, it's, people fall for this all the time. But I'm telling you, there is more peace that occurs in your life when you spend money that you have and you don't play the credit card game. All right, before we get to the rest of my Too Good to Be True list, I do want to tell you about one of our sponsors,

Starting point is 00:03:19 Christian healthcare ministries. When you go against what society thinks is, quote, normal, it might feel weird at first, but that is totally okay. And we want you to be weird if that means you're doing things intentionally, including how you spend your health care dollars. And one way to be intentional is with Christian health care ministries. CHM is not health insurance. They're a health cost-sharing ministry that's helped hundreds of thousands of families like yours take care of health care costs without sacrificing their freedom. Program starts as low as $98 a month. So find out more and join at chmistries.org slash budget. That's chmistries.org slash budget. All right, number four, is weird mortgage loans. So whenever you're getting a mortgage, we always suggest a fixed rate

Starting point is 00:04:04 mortgage. And again, ideally 15 year. That's what we're shooting for people. But again, the fixed rate is key because you're just locking in your rate. You know what's going on. But there's all these other types of mortgage loans that you can do. So this is like FHA loans, balloon mortgages, variable rates, adjustable rates. I mean, like all the way around this idea just to get you in a home. And that's what people end up doing. And so a lot of these, again, long term are not good. They end up coming back and not being great for you financially. But also, sometimes they allow you to get in a home earlier than what you should. So the idea of your home is the largest purchase that majority of us make in our lifetime. And people will rush

Starting point is 00:04:43 into this when they're not financially ready. And some of these mortgages kind of prop them up to say, oh, yeah, you'd be okay in it. Then you get in the home and realize, oh, my gosh, this is so expensive. And my loan, you know, depending on what type of mortgage you get, it's changing. I don't know what to expect, and it ends up being more of a curse than a blessing. So the best thing that you can do when it comes to a mortgage is as much predictability as possible is really key. So locking in a fixed rate mortgage is so, so important. And if you're buying, even now as we're talking during this timeline, like mortgage rates are higher than they were two years ago. But they may come back down. And if they do, you can refinance if it makes sense for you. But locking in your

Starting point is 00:05:21 mortgage with a fixed rate is the way to go. Number five, in-store credit cards. So earlier we were talking about just credit card rewards, but this is for specific retailers. And again, this idea of like, oh, you can save 20% because you can't afford the $50 retail purchase, that's not a great place to be. And if it is, like, give us a call on the Ramsey show. We'll talk about really your money situation. Because if that's what's getting you in, not only are you going to spend more money, but again, if you're falling for this saying, oh gosh, I have to have that 20% off in order to purchase this, you probably shouldn't be buying it in the first place. All right, now what happens? if you are in the middle of one of these two good to be true offers, well, the idea here is taking

Starting point is 00:06:00 control of your money. And so if you're able to get out of any of these, do it and just learn your lesson. Sometimes we call it stupid tax where you end up paying more in a situation, then you probably should because you rushed into it or you didn't do your research. And that's okay. Nobody's perfect. It happens to all of us. But the idea is getting back to having control over your income. And the best way to do that is with a budget. And so I love the every dollar app. If you don't have a great budgeting app, you need to download this. This is so, so key because it's going to help you take control of your overall budget. And again, in the end, this is what the budget's for.

Starting point is 00:06:33 It really allows you to take ownership over your money and allows you to spend money where you want to spend, save what you want to spend, and give what you want to give. So it's really a plan for your money. So I'll put a link down below for every dollar. Make sure to check that out. And to avoid more common money traps, make sure to not miss my episode on how airlines and other retailers are robbing you blind. and you can click here and check that, or if you're listening on podcasts,

Starting point is 00:06:57 you can click the link below. All right, you guys, remember to take control of your money and create a life you love.

The Rachel Cruze Show - Tempting Money Traps That Are Too Good To Be True

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