Mark Kalinowski has been a credit counsellor for nearly 14 years, helping people of all generations manage their debt. But this year, more than a quarter of the clients he saw in his Calgary office were under the age of 35.

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

The Credit Counselling Society — the debt management non-profit where Kalinowski works — served more 18-to-34-year-olds in 2025 than at any other point in its history, its spokesperson told CBC News.

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Many have a mountain of student loans. Some are facing the daunting task of managing a credit card for the first time. Still others are navigating the high cost of living against slow-growing wages.

As if that weren’t enough, Kalinowski and other experts say the ubiquity of “buy now, pay later” plans are compounding the problem and fuelling a debt crisis among 20 and 30-somethings.

“I won’t say that they feel hopeless, but they do feel a little bit lost and they’re not sure how to gain traction,” said Kalinowski.

Buy now, pay later debt ‘hard to manage’

The problem that those under 35 face isn’t necessarily that they’re accumulating debt — it’s where the debt is sourced from, explained Jodi Letkiewicz, an assistant professor at California State University currently on leave from York University in Toronto.

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

That kind of consumer debt shows “warning signs” of a fractured economy, said Letkiewicz. “Because when people are late on those, it tells us that they’re not able to keep up with their cost of living.”

The rise of buy now, pay later plans, which allow consumers to purchase an item online and pay it off in manageable chunks, is an important piece of the financial puzzle.

Researchers are still trying to understand how consumers interact with buy now, pay later plans. One peer-reviewed study published in December 2024 found that younger consumers in the U.S. are more likely to use the plans for online purchases compared to older demographics, and are likely to spend more as a result.

Another, published in March of last year, found that U.S. consumers who used buy now, pay later saw sharp increases in bank overdraft charges and credit card interest and fees compared to those who didn’t use the services.

There’s less research on the Canadian side. While a recent pilot study from the Financial Consumer Agency showed that the 18-34 year olds surveyed used online buy now, pay later plans at a far higher rate than any other age group, the representative sample is far too small — 66 people overall — to generalize its findings.

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Buy now, pay later plans give consumers the option to pay for everyday products in instalments, but some financial experts say it could create a hole that some people can’t get out of.

However, Letkiewicz points to the ubiquity of services like Klarna, Affirm and PayPal — which are all now available to Canadian consumers who shop online — as a potential red flag.

“It’s easier than going and getting a credit card, it’s easier than getting a payday loan. And so I think that’s part of what’s happening — it’s become so much easier and it’s not all in one place,” said Letkiewicz.

“So it doesn’t look like, ‘Oh, I have $30,000 in credit card debt.’ It’s like, ‘Oh, I’m making this payment to this, and this payment to this, and this payment to this,’ and that gets really hard to manage.”

‘Less equipped’ to deal with economic swings

It’s not unusual for younger cohorts to miss credit payments at a higher rate than older generations, according to Rebecca Oakes, the vice-president of research at credit reporting firm Equifax in Toronto.

“Generally speaking, they’re kind of less equipped to manage peaks and troughs in the economy and things like that,” she told CBC News.

However, Equifax’s internal data shows that people under 30 who have a credit card have seen their average balance rise faster than other demographics for the last two years.

That cohort has also seen the fastest growth in missed payments on credit cards in the last year, according to Equifax research.

About one in 20 people between the ages of 18 and 35 missed a credit card payment during the third quarter of this year, according to Equifax. The delinquency rate for 18-to-25-year-olds stood at 2.11 per cent, up 16.58 per cent from the same quarter last year.

Meanwhile, a third quarter credit industry report from TransUnion recently showed that delinquency rates for those born between 1995 and 2010 rose eight basis points to 1.29 per cent compared to the same period last year.

Roughly 84 per cent of those clients have credit cards, compared to 61 per cent of people born between 1980 and 1994 who had credit cards at the same age.

According to TransUnion, the younger group is missing fewer payments than the older group did when they were the same age, and their balances aren’t as high.

A pattern of missed payments, however, is going strong, according to Oakes.

“Whereas we’ve seen more stabilisation coming in, perhaps, with some of the older consumers, the young consumers still seem to be struggling and still seem to be increasing their missed payments,” she said.

Kalinowski, the credit counsellor, says he sometimes works with clients 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 until it purges off their credit report.”

But he’s also found that younger clients are more likely to seek help in the first place.

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“It’s more socially acceptable in their eyes to say, ‘Look, I’ve got a money problem. It’s something that I am going to have to talk about and go and try and fix sooner than later,’ ” he said.

“The fantastic thing about that is the sooner you try and fix an issue, the sooner you come up with your solution and you move on with life.”