This story is part of 12 Days of Tips, helping you make the most of your tech, home and health during the holiday season.
TikTok is good for a few things: niche memes, butter boards and dance routines, for sure. But you might want to look elsewhere when seeking out financial advice. Risky money advice abounds online -- but social media makes it even easier to stumble upon dangerous strategies that claim to help you save cash.
With more than one-third of Gen Zers turning to TikTok for financial advice, avoiding tips that seem too good to be true is crucial. Following bad money advice can not only cost you financially -- in some cases, it could land you in legal trouble.
We spoke with an attorney and a credit counselor who've seen firsthand what can happen when people listen to bad money advice on TikTok. Here are a few TikTok money tips that can land you in financial and legal trouble.
Anyone can claim to be an 'expert' on TikTok
Michelle Creeden and David A. Gelinas work for the National Legal Center, where they help people dealing with credit and debt issues. Creeden is an attorney licensed to practice law in New Hampshire and is experienced in consumer and debtor rights. Gelinas has over 20 years of experience in credit counseling, not-for-profit debt management and debt resolution.
Both have helped clients who have had the misfortune to follow the wrong financial advice on TikTok.
"There are plenty of people who are going to teach you things that they don't fully understand," Creeden said. "I see a lot of clients that will bring me or send me links … and it really is just terrible advice from someone who might have known a little bit of information -- 'just enough to be dangerous' is how I refer to it."
According to Gelinas, FinTokers tend to give a lot of general information. Such advice doesn't consider the level of risk for the viewer or how dire their financial situation may be. It also can skip some important specifics.
"It can easily get someone in trouble," he said.
For instance, one of Creeden's clients saw TikToks about the snowball debt repayment method. It's a popular strategy for getting rid of credit card debt that suggests paying off the cards with the lowest balances first to keep yourself motivated.
To learn more about saving money this holiday season, read about how to save on daily necessities with these simple tricks.
Here's just one example of a TikTok from @thecreditbrothers about the snowball method:
The Easiest Way To Pay Off Your Credit Card Debt: The Debt Snowball Method♬ original sound - Credit Brothers
The creator hasn't said anything wrong, and this debt repayment strategy does work for many people. However, @thecreditbrothers, like many others on FinTok, fail to mention that you still need to continue paying all your other debts too.
"Not everybody realizes that," Creeden said. "If you're following a piece of information or advice without really understanding the whole scheme, it can really cause problems. So I had [a client] that decided to follow the advice of paying the smallest balance first. And so she stopped paying her taxes and her student loans."
This caused immediate problems. As a result, the person who was simply trying out the snowball method had to seek Creeden's services.
The same creator, @thecreditbrothers, has offered another piece of advice that's common on the platform about dealing with debt:
@thecreditbrothers Have You Ever Paid A Debt Collection Agency? #credithacks#creditrepair#credittips#debtcollector#debtcollection♬ original sound - Credit Brothers
Another one of Creeden's clients decided to try it.
"They didn't have any plan on how to deal with the debt or how to minimize the risk," Creeden said. "Then they came to us after they'd been sued on multiple debts. And they just had no plan. Nothing."
Creeden's client didn't think a plan was necessary. They were just following credit advice on TikTok that seemed simple enough. However, according to Creeden, the advice was given without any explanation of the risks and resulted in garnishment that Creeden had to help fight.
Legal advice on TikTok is particularly dangerous
Things can get even more dangerous when TikTokers provide advice that veers into legal territory.
For example, this TikTok from @ksmithcredit talks about the time frame you have to respond to a collection lawsuit:
@ksmithcredit Here’s the first thing you need to do.. #credit#collections#lawsuit#gotserved♬ original sound - Kenneth Smith Jr
However, response windows vary by state, and the risks mentioned don't apply in all states. For instance, wages are not garnished for collection cases in Texas, South Carolina and a few other states.
"Scaring people into filing answers in all situations makes no sense and can cost money," Creeden said. "Filing fees can be large -- $400 in some courts."
This TikTok from @thedisputeher suggests you remove your valid addresses from your Experian credit report:
@thedisputeher This credit hack will help you get negative accounts off your credit #experianbackdoor#creditrepairhacks#creditrepair#pushinp🅿️♬ pushin P (feat. Young Thug) - Gunna & Future
The idea is that the credit bureau will also remove the negative accounts associated with those addresses. However, credit bureaus won't delete the information that's accurate. Plus, even if this "hack" works, you risk losing the positive information tied to the removed addresses too. So, taking this advice could still end up hurting your credit score.
TikTok creator @epiccreditscore offers legal advice in all states, despite states having different laws.
@epiccreditscore#lawsuit#olddebt#debt#served#court#creditrepair♬ original sound - Jla
In this TikTok, the creator suggests using the "statute of limitations" defense (referring to the time period a company has to take legal action against you) if a collections agency sues you. This general legal tactic is common advice on TikTok, but it's also misleading.
"It's true that [statute of limitations] is an important aspect," Gelinas said. "[But] that is not always that simple." According to him, the best practice is for an in-state attorney to review the case, since it can often be highly complicated.
"I don't advise people outside of the area that I'm capable of practicing in," Creeden said. "When people who are not attorneys are doing it in all the states, they are more likely to give the wrong information."
The consequences, she said, can be severe and can impact your wages and credit.
How to find helpful TikTok money advice
Does this mean you should never come to TikTok and social media for financial advice? Not necessarily.
Both Creeden and Gelinas agree that there are benefits to browsing money tips on FinTok. Creeden acknowledges enjoying using TikTok and finds some FinTokers incredibly positive and helpful: @journeycreditacceptance, for instance, is someone she follows and appreciates.
@journeycreditacceptance Truth About Credit Karma #BbStyleFearlessly#MACChallengeAccepted#GetTheWChallenge#finance#fyp#fypシ#creditscore#credit#finance#moneytok#foryou#creditreport#mortgage#auto#autoloan#bank#creditrepair♬ original sound - Journey To Credit Acceptance
Plus, before the days of financial influencers, money advice wasn't as accessible.
"My generation didn't know much about credit or debt or… how to invest," Creeden said. "You know, those aren't things that we discussed at all in school."
Today, social media is changing that. Young people can get familiar with these topics simply by scrolling on TikTok. They can learn important financial terms and gain an understanding of money basics. All they need to do to keep their wallets safe is to stay vigilant.
There's no official entity monitoring TikTok to check whether creators offer valid financial advice. The Consumer Financial Protection Bureau isn't going to come after FinTokers who offer inaccurate information. It's up to you to choose what advice to trust.
Gelinas recommends being "very diligent… and very discerning." If you find money advice on TikTok you want to try, verify it against multiple sources. Dig in to research the topic in full before taking any steps. It's also a good idea to take a closer look at the creator. Are they a recognized expert on the matter? What credentials do they have to prove it?
Remember that personal finance is also always personal. What works for others might not apply in your situation, especially if you're experiencing financial trouble. When you're in a crisis, it's best to reach out to a professional for help. You wouldn't (or at least shouldn't) go to TikTok for medical advice on a serious health issue. It's smart to treat your financial health the same way.