The latest reports from credit agency Equifax Canada have revealed a disturbing new trend. Not only are Millennials racking up ever-higher amounts of debt, they're having an increasingly harder time making payments.
Call it juvenile delinquency. Compared to this time last year, delinquencies among Canadians aged 18 to 25 rose by 11.7%, and nearly one in five describe themselves as being in "debt hardship." Delinquency rates also spiked among the 26- to 35-year-old age group as well, by 9.7%.
In fact, the only age demographic that didn't see delinquency rates rise were senior citizens, age 65 and up. But that doesn't mean that they're out of the clear, either. The average overall debt in this age group managed to rise by an average $1,100 over the past year.
"For the most part, older Canadians have always demonstrated an ability to handle their spending and what they owe," said Equifax Canada's senior director of decision insights, Regina Malina. "Millennials should be reminded to practice good budget and money management habits."
Crippling debt and delinquency may spill over into other facets of young people's lives as well. It may be difficult to save for a down payment on a house if money is already tight -- and it may be downright impossible to find a mortgage lender if your credit report has been severely damaged by delinquency.
Moreover, our money habits tend to affect our personal relationships, too: couples who have arguments about finances once a week or more are 30% more likely to get divorced than couples who have financial disagreements even a few times a month. Escalating debt issues could be a marriage-breaker waiting to happen.
Across the board, consumers owe an average $21,878 right now, not including any mortgage loans. That's an increase of 3.4% from last year. Why are so many Canadians seeing their debts rise, when we're supposed to be coming out of the recession?
Part of it may have to do with geography -- and in particular, certain parts of the country's dependence on oil for jobs and economic export. The hardest-hit provinces were Alberta, Saskatchewan, and Newfoundland, where jobs continue to be cut and spending continues to get slashed in the face of plummeting oil prices.
In fact, Ontario and Quebec delinquency rates are down from last year, at 1.1% each. It's perhaps telling that the overall trend stems so heavily from those oil-producing regions.
Malina also said that the overall delinquency rates "are still relatively low and that has to be kept in perspective, but we definitely are seeing the impact of the prolonged situation in those regions."
"It looks like it is a fairly persistent situation," she continued, "so we'll probably see these increases for a while until the region will adjust to the new economic situation."