More and more of us are turning to AI platforms with questions on a variety of topics, and the subject of money and personal finances is no exception. A recent Capital One UK survey (opens in a new tab) found that 13% of people have used AI for help with their personal finances in the last 12 months, and 5% said it was one of their main sources of financial learning.

AI chatbots, or LLMs (Large Language Models) as they are also known, are easy to use. You can type a question in plain English and get an answer in seconds. That can feel really useful, especially when you want a quick, straightforward explanation of something.

But AI is not a financial adviser, and there are times when using it for money guidance could lead you in the wrong direction. This article explains where AI might genuinely help, where you should be more careful, and how to get the most out of it without putting yourself at the potential for risk.

Is it safe to ask AI for financial advice?

AI can be useful for general financial questions, but it should not be treated as a substitute for regulated financial advice (opens in a new tab) as this can only be provided by somebody with a relevant financial qualification.

AI may give you a good starting point, but the information it provides might not always be accurate, up to date, or relevant to your personal situation.

Why you should treat advice from an AI with caution:

• AI platforms may not always have access to the latest information - interest rates, rules and products can change frequently, and there's no guarantee the information provided is current or correct.

• AI can produce responses that sound authoritative even when they're wrong - something known as a 'hallucination.' Because AI doesn't flag when it's uncertain, the only way to verify is to cross-reference with a trusted source.

• While AI can give the impression of understanding your question, it's generating responses based on patterns rather than genuine comprehension - so it can sound confident even when it's wrong.

• AI gives general answers. It does not ask questions to understand your full financial picture the way a trained adviser would.

• Sharing personal financial details with an AI platform could put your privacy at risk.

That isn’t to say that AI can’t be useful; it just means you should treat it as a starting point rather than a final answer, and always check anything important with a trusted source.

What can AI help with when it comes to money?

Used in the right way, AI can be a helpful tool for building your financial understanding. Below are some of the areas where it tends to perform well, and a few things to watch out for in each.

Understanding financial terms and building your knowledge

This is one of the stronger uses of AI, and one that is easy for you to verify you’ve got the right answer. Financial jargon can be confusing and intimidating, and AI is generally good at explaining things in plain English. If you’ve come across a term you don’t understand, on a credit card statement, a loan agreement, or a letter from your bank, you could ask AI to break it down what that means for you in a way you understand.

Another common use is to ask AI the questions you might not know who to ask, like “what is APR (opens in a new tab)”, “what affects your credit score (opens in a new tab)?” or “how does credit card interest work? (opens in a new tab)” It can be a good way to start learning. That said, it’s always worth checking AI responses with information from a trusted provider, like your bank or credit card company.

Can AI help me compare or research credit cards?

According to a recent Capital One UK survey (opens in a new tab), comparing financial products, such as credit cards, is another popular use of AI platforms. AI can be useful to get a general overview of different financial products, for example, explaining the difference between a balance transfer credit card (opens in a new tab) and a purchase credit card, or what a balance transfer actually involves. This kind of background reading could be a helpful first step before you speak to a provider directly.

However, AI may not have access to the latest deals, rates or eligibility criteria. It could miss products that might be a better fit for your situation, and it has no way of knowing your full financial picture. Incomplete or outdated information could lead you to apply for a product that isn't right for you, resulting in a rejected application and a hard search on your credit file.

For any significant product decision, a financial adviser would be better placed to help.

If you want to know if you’ll be eligible for a credit card before applying, ‘soft search’ tools or eligibility checkers like our QuickCheck (opens in a new tab) tool will let you know if you’ll be accepted before you apply and won’t impact your credit score.

Checking whether something might be a scam

Scams are constantly changing and scammers often use pressure to push you into acting quickly. AI can be a useful second opinion in those moments - you can quickly describe a suspicious email, text message or website and it might help you spot some common warning signs before you respond.

However, while AI can be a helpful safety net, it may not recognise newer scam tactics, so it shouldn’t be your only line of defence.

If you’re worried about a transaction (opens in a new tab) or think you’ve been scammed, you should contact your bank or credit card provider right away and report suspicious activity to Report Fraud (opens in a new tab).

Where should you be more careful when using AI for financial guidance?

The National Cyber Security Centre (opens in a new tab) recommends “not to include sensitive information in queries to public LLMs”. So, the more personal or sensitive your question, the more cautious you should be.

Sensitive or private documents

Whenever you’re using an AI platform, you should think carefully about the personal information you’re sharing and read the platform’s privacy policy to understand how your data will be used and shared.

If you’re using a free version of an AI tool, you should also be aware that your data may be used to train the tool itself.

Sharing sensitive financial documents with an AI tool, like bank statements, payslips or credit agreements, risks exposing personal information like your full name, address and account numbers in ways you didn’t intend.

Instead of uploading documents themselves, an alternative approach would be to ask AI about any terms or phrases within those documents that you need help with.

Advice for your personal financial situation

AI tools can only base their responses on the information available to them. Even if you share detailed financial information, AI isn't qualified to give personalised financial advice - and sharing that level of detail comes with its own privacy risks. And, if you follow bad advice given to you by an AI, there’s no consumer protection for any money lost.

If you’re looking for some guidance with your finances, free services like Money Helper (opens in a new tab) and Citizens Advice (opens in a new tab) are great places to start. If you’re looking for financial advice, you’ll need to speak with a qualified financial adviser.

Budgeting and managing your day-to-day spending

AI can be a handy tool for practical money tasks, like creating a template for a simple budget or savings plan. This can give you a useful starting point if you’ve never built a budget before.

If you are using AI to help with budgeting or your day-to-day spending, as mentioned, just be mindful of what you share about your personal financial situation and always check the platform’s privacy policy to understand how your data will be used.

Information about the financial products you use

If you want quick answers about financial products you're using - like your bank account or credit card - it's natural to turn to AI. However, when it comes to exact features, fees, or terms of your specific accounts, the safest and most reliable option is to go to your provider directly. AI can produce inaccurate or outdated information, while your bank or credit card company's website, app, or customer service team will have the most up-to-date details..

Should I use AI for help with my personal finances?

AI can be a helpful tool for learning about money, understanding financial terms and working through rough budgets. For these kinds of general, low-stakes questions, it could save you time and help build your confidence.

For anything more personal or complex, especially decisions that affect your ability to access credit or impact your long-term finances, a regulated financial adviser or a trusted source will always be better placed to give advice that’s specific to you.

If you do use AI for financial guidance, keep three things in mind:

• Be mindful of what personal information you share - the National Cyber Security Centre recommends not including sensitive information in queries to public AI tools.

• Always verify what AI tells you, especially before making a significant financial decision.

• When in doubt, go to a trusted source, your bank, your credit card provider, or a regulated financial adviser.