Scott Terrio sees it all the time. The manager of consumer insolvency says the average credit card balance in Canada is less than $4,500, but the cases he saw last year averaged more than $12,000 for this young group.
“We looked at Q1 for 2023 versus Q1 for 2024,” Schwartz said of the firm's clientele. “And specifically for those people that were under 40, in our client base, we’re seeing that the debt loads for those people has increased about 27 per cent. Like all of a sudden, when people aren’t making that much more, if anything more at all … not to mention the interest rates that have gone up over the last little while, then it becomes more and more of a challenge.
“They run their Visa back up because they didn’t cut up their card,” Terrio said. “So now the banks got you three times, and they got you for life.” He also warned against so-called lifestyle creep, when people start making a bit more money, and just start spending more. “If you have the opportunity when you’re young, when you’re not spending as much on rent, you’re not spending as much on food, if you can cut back on how much you’re socializing — that’s a great place to start to build up that reserve fund,” Schwartz said.