Rachel Cruze Exposes 6 Money Hacks That Actually Hurt You
Written by
Ashley Donohoe
Edited by
Cory Dudak
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When making everyday money decisions, you might mistakenly think you’ve discovered a smart way to save on purchases or become wealthy faster. You may also fall for online money advice that sounds reasonable at first glance, but can lead to severe problems later.
In a recent YouTube video, money expert Rachel Cruze discussed six popular money hacks that are actually traps. Find out what can happen if you follow these hacks, and which alternatives help you win with money over the long term.
Buy Now, Pay Later
Whether you’re buying a new phone, shoes or even your lunch, you might see a buy now, pay later method such as Klarna or Affirm at checkout. While splitting your purchase into small, potentially interest-free payments can seem appealing, these plans can become a costly trap.
Cruze said buy now, pay later services not only put you in debt, but also increase the risk of overspending. Plus, the Federal Reserve’s Economic Well-Being of U.S. Households report noted that around 25% of buy now, pay later users in 2024 made late payments, which can lead to fees.
You can avoid these risks if you take Cruze’s advice to budget your money so you save enough to cover your purchases entirely in cash.
Store Credit Card Discounts
A cashier or website might offer you an attractive discount on your purchase if you sign up for the store’s credit card. While you might feel excited about the 25% off your $200 purchase, you’ll likely pay it back later in a different way.
Cruze said, “Well, that turns into 25% interest really, really fast, and it’s not worth taking on additional debt.”
Before applying for a store credit card, consider the long-term financial impact. Like with buy now, pay later plans, Cruze said it’s better to just budget, save and use cash instead.
Car Leases
2025 Experian data from June showed average monthly payments of $682 for car loans versus $659 for leases. The cheaper payments can make a lease seem smarter for your current budget, but Cruze explained the long-term costs are often higher.
Not only is leasing comparable to renting, but you’ll also have to deal with restrictions on vehicle use, which can mean paying fees for things like excess mileage or wear and tear. Plus, there are costs and challenges associated with escaping your lease early.
Cruze recommended the cheaper option of saving cash for a used car purchase. She also advised selling a financed vehicle if you’d need more than two years to pay off the balance, even if that requires getting a small loan to cover the gap between the loan and sale price.
Minimum Payments
A FINRA Foundation study found that 41% of Americans sometimes only made minimum payments on their credit cards in 2024. While some people don’t have enough money to pay more, others think minimum payments are simply a good decision for cash flow purposes.
But Cruze explained, “So, this is a trap because you’re actually paying thousands more than what you actually owe because of interest.”
She suggested prioritizing becoming debt-free by setting aside a $1,000 emergency fund and then using the debt snowball method to attack your balances. While you’ll continue with minimum payments for most debts, you’ll direct extra money toward the account with the smallest balance until it’s paid off. You can then move on to the next smallest balance.
Lack of Insurance Coverage
Since monthly premiums can quickly add up, you might decide not to purchase important insurance policies so you can stretch your budget. However, this puts you at risk of losing the money you have if you face an uncovered event, such as a major illness or natural disaster.
Cruze suggested using the Ramsey Coverage Checkup tool to learn which insurance policies are necessary for your situation. That way, you can avoid paying for unnecessary coverage and still protect your finances. Comparing several quotes and looking for discounts is also wise.
Trendy Get-Rich-Quick Schemes
Even though you might hear from people who claim they quickly became rich investing in things like single stocks, crypto and gold, Cruze said these can involve a lot of risk. The volatility means you can lose a lot of money fast rather than make it, so a slower approach is safer.
She recommended index funds and mutual funds as more reliable long-term investments that are suitable for your retirement savings. These diversified investments aren’t free from volatility, but holding them for a long time allows you to better ride out the fluctuations.
If you’re wondering how to proceed, Cruze advised paying off your debt and then consistently investing 15% of your earnings. You can use a tax-advantaged account, such as a 401(k) or IRA, to contribute up to the yearly limits and a brokerage account for excess funds you want to invest.
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