Young Canadians, already facing financial pressures due to the rising cost of tuition and rent, are racking up debt at an alarming rate.

Young people in particular are increasingly being tempted and targeted, by the ease of shopping online, and buy now, pay later arrangements for even small purchases, at high interest rates.

Licensed insolvency trustee and Senior Vice-President of BDO, Sarah Morrison says most people are familiar with buy now, pay later arrangements for big purchases, but now they’re available on ordinary, low-value purchases at very high interest rates.

“Buy now, pay later is really big right now, it’s grown a lot in Canada. It’s grown about 20 per cent per year, and it’s currently at a base about of $200 million here in Canada. It’s projected to grow to about $1 billion in the next three years. So before you used to buy now, pay later for big things like a car, or appliances, and now it’s for everything. You can buy a t-shirt, you (can) buy lipstick.”

She says younger consumers are seeing higher delinquency rates because of the high interest rates associated with buy now, pay later arrangements.

“The interest rates are super high” says Morrison, “I think they’re upwards of 37 per cent. And now they have these little micro payments that if you are budgeting, they’re very hard to keep track of, and so that’s when the delinquencies start and our younger generation is seeing the highest rate of delinquencies that we’ve seen, ever.”

The latest stats from Equifax show a 20 per cent jump year-over-year in delinquency rates among consumers aged 18 to 36.