Reddit can be a great place to learn from real-life experiences, but when it comes to money talk, not all advice is worth following. Personal finance forums like r/DaveRamsey or r/CalebHammer have become home to some surprisingly bad takes on managing finances.

While many users share genuinely helpful insights, others spread outdated or flat-out harmful advice. Some of these suggestions might sound tempting in the moment, but they can lead to long-term financial setbacks.

Here’s a breakdown of some commonly shared advice that can cause more harm than good—and what’s actually smarter to do instead.

1. Using a Car Loan to Build Credit

It’s common to hear that financing a car is a good way to establish credit. But borrowing money for something that rapidly loses value isn’t a great starting point. One Reddit user shared they were told to finance a vehicle purely for the credit-building aspect. Instead, they chose to buy a high-mileage used car in cash and saved significantly.

Freepik | Getting a car loan to build credit is often advised, but it’s a poor strategy for a depreciating asset.

A better option would be to start with a secured credit card. It offers the same credit-building benefits without putting someone in thousands of dollars of auto loan debt. Being added as an authorized user on a trusted family member’s card can also help build credit history without any major risk.

2. Skipping Savings in Your 20s

One of the most damaging ideas often repeated is that saving young doesn’t matter. The logic? Higher earnings will come later in life and make early savings insignificant. That mindset has led many to spend freely throughout their twenties, only to face financial stress in their thirties. A Redditor admitted they spent nearly everything during their early career, expecting to catch up later—only to realize they didn’t reach the income level they’d assumed.

It’s smart to balance fun with foresight. Setting aside even a small percentage of each paycheck can build momentum, especially when compound interest kicks in. Financial independence doesn’t happen overnight, but consistency matters more than large one-time deposits.

3. Maxing Out Student Loans

Another user revealed they were advised to max out federal student loans because they offer low interest rates. The reality? Just because the money is available doesn’t mean it should be used. Excessive student loan debt adds long-term pressure and can delay major milestones like buying a home or starting a business.

A more thoughtful strategy involves only borrowing what’s truly needed. Scholarships, part-time jobs, and even community college for the first two years are all valid ways to reduce dependency on loans. Federal loans may be more affordable than private ones, but they still need to be repaid, often for years.

4. Taking a Loan to Invest in Crypto

Cryptocurrency continues to fascinate many, and for some, the lure of fast profits is too tempting. One Redditor said they were told to take out a second mortgage to buy Dogecoin. It’s a risky move that could easily backfire if the market tanks, which it often does.

Instead of using borrowed money for volatile investments, focus on building a balanced portfolio. Index funds, mutual funds, and ETFs offer a more stable path to long-term growth. High-risk investments should only be made with money that isn’t essential for basic needs or emergencies.

5. Treating Credit Cards Like Free Money

Freepik | wayhomestudio | Use credit card rewards as a bonus, not an excuse to spend extra.

Credit card points and cashback rewards can be appealing, but they shouldn’t be an excuse to overspend. A user recalled being told that the more you spend on your credit card, the more money you make. That mindset often leads to accumulating debt that becomes hard to manage.

The most effective way to use a credit card is to treat it like cash. Only spend what you can pay off in full each month. This helps avoid interest charges and keeps your credit score in good shape while still earning rewards.

6. “Buy Now, Pay Later” Offers

Spreading payments over time might seem convenient, especially when there’s no interest involved. However, Redditors have pointed out how easily this feature can lead to impulsive purchases. When multiple BNPL payments stack up, they can quietly stretch a budget too thin.

If something isn’t affordable today, delaying the purchase might be the smarter choice. Just because a payment plan is available doesn’t mean it’s the right move. Overspending in small monthly installments still adds up quickly and can damage your financial health if missed payments hit your credit report.

Choose Financial Advice Carefully

Not all advice is created equal. Even well-meaning friends or strangers online can offer guidance that’s more harmful than helpful. Personal financial decisions should be based on real numbers, not trends or anecdotes.

Getting help from a certified financial planner or someone with proven experience is always a safer path. Learning from others’ mistakes is valuable—but only when those lessons come with better alternatives.

Always stay cautious with advice found online, especially when it concerns your financial future. Trust actions backed by logic, not just opinions.

The Worst Financial Advice on Reddit

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