More young people getting into debt amid tough economic times

A new report finds more young people are getting into debt as they face a tough economic outlook, and technology is making borrowing money easier than its ever been.  

“That age group, the 18-34 is under a tremendous amount of pressure,” said Mark Kalinowski, a partnership and education specialist with Credit Counselling Society.

It was the need for a new MacBook that prompted a young Calgarian to take advantage of a ‘buy now, pay later’ loan.

‘Buy now, pay later’ loans allow consumers at checkout to choose to split their payments when making purchases like electronics, airplane tickets and even clothing.

“It helps with managing the payment… My term was two-years, I was able to pay it off in a year because I was really on top of it,” she told CityNews.

But that’s not the case for every person accessing these types of loans. The Credit Counselling Society says people aged 18 to 34 are increasingly reaching out to them for help, with the cohort now making up over 25 per cent of their clients.

The Credit Counselling Society say about 40 per cent of their young clients have reported accessing these types of loans, potentially saddling them with high interest repayment terms. 

“It’s very difficult with that ‘buy now, pay later.’ You think it’s one or two little debts but overtime it eats up more and more of your cash flow and it means you can’t save,” Kalinowski said. “One little happenstance happens that puts you behind you don’t have the ability to overcome.”

“I think the whole ideal behind them is kind of sinister and kind of spooky,” said another Calgarian. “It’s making an economic bubble. It’s creating a system where people can’t pay for these things in the long run.”

While ‘buy now, pay later’ loans are growing in popularity, so is the usage of payday loans by young people, as they use them to make ends meet to buy necessities such as groceries.

The organization says Calgary, Edmonton and Vancouver are the three cities in the country seeing the most young people reaching out to them. 

“If you need help [go to] your bank, your credit union, if you have a trusted financial planner, if not a nonprofit like Credit Counselling Society is a great place to go to start,” Kalinowski said.