Young Canadians are hitting debt trouble earlier — and new payment tools may be making it worse

More Canadians under 35 are seeking help with debt than ever before, pointing to growing financial strain among younger households as the cost of living rises and borrowing options expand.

Credit counsellors say the trend isn’t driven by reckless spending, but by the increasing difficulty of covering everyday expenses — and by how newer forms of credit spread those costs across multiple payment plans.

Mark Kalinowski, a credit counsellor in Calgary, says more than a quarter of the clients he worked with this year were under the age of 35, the highest share he has seen in his career (1). Many arrive overwhelmed and frustrated, unsure why they can’t seem to get ahead despite working and trying to manage their finances.

“They’ll come in and sometimes they’ll cry, sometimes they’ll be angry,” Kalinowski told CBC News. “They’re very, very frustrated because they don’t know why their life’s on hold.”

Debt stress isn’t about splurging — it’s about staying afloat

The challenge facing many younger Canadians isn’t just how much debt they carry, but the type of debt they rely on to make ends meet.

Jodi Letkiewicz, an assistant professor currently on leave from York University, says much of today’s borrowing among people in their 20s and 30s reflects basic financial survival rather than discretionary spending.

“This isn’t necessarily, ‘Oh, they’re just going out and partying and spending and shopping,’” Letkiewicz told CBC News. “This is just like basic consumption smoothing. It’s trying to pay bills.”

That distinction matters. When consumers fall behind on short-term obligations tied to everyday expenses, it can signal deeper affordability challenges — particularly in a high-cost environment where wages haven’t kept pace with housing, food, and transportation costs.

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Why buy now, pay later can be harder to manage

One factor adding complexity is the rise of buy now, pay later services, which allow shoppers to split purchases into smaller payments spread across weeks or months.

Letkiewicz says the issue isn’t always the price of individual purchases, but how fragmented those obligations become over time.

“It’s easier than going and getting a credit card, it’s easier than getting a payday loan,” she told CBC News. “It’s not all in one place.”

Instead of seeing one clear balance, borrowers may be juggling several small payments at once — each manageable on its own, but collectively difficult to track. That fragmentation can make it harder to recognize when spending has crossed into financial strain.

Early credit mistakes can linger

Kalinowski warns that missed payments early in adulthood can have long-lasting consequences, since credit issues can remain on a credit report for years.

“If they impact their credit in a substantial way when they’re young, it tends to stick with them for six or seven years,” he told CBC News.

At the same time, he sees a shift in how younger clients approach financial trouble. Compared with older generations, many are more willing to acknowledge a problem and seek help sooner.

“It’s more socially acceptable in their eyes to say, ‘Look, I’ve got a money problem,’” Kalinowski told CBC News. “The sooner you try and fix an issue, the sooner you come up with your solution and you move on with life.”

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CBC News (1)