Gen Z Driving Credit Growth in Canada: What It Means for Your Wallet

Gen Z Driving Credit Growth in Canada: What It Means for Your Wallet

Key impact: If you are a Gen Z Canadian, your borrowing habits are reshaping the country’s credit market. This could mean higher debt loads for you, and potentially tighter lending rules for everyone.

A new TransUnion report from Q1 2026 shows that Gen Z is the fastest-growing group of credit users in Canada. Over 460,000 new credit-active consumers joined the market in the past year. Their average non-mortgage debt rose 9.1% to $13,621. This growth is driven by credit cards and personal loans for daily expenses.

While overall delinquency rates are stabilizing, Gen Z still has the highest serious delinquency rate at 2.75%. That is an improvement from last year, but it remains a concern.

What does this mean for you?

For Gen Z, this means managing higher debt loads early in life. For older generations, it signals a shift in borrowing patterns that could affect interest rates and lending standards across the board.

Who is affected?

• Gen Z Canadians (born 1997–2012): You are the main driver of this credit growth. Your borrowing habits are setting the stage for future credit trends.
• Millennials and Gen X: You may see changes in credit availability as lenders adjust to younger borrowers’ risk profiles.
• All Canadians: If Gen Z defaults rise, lenders could tighten credit for everyone. This could make loans and credit cards harder to get or more expensive.

What you should do

If you are Gen Z:

1. Build credit responsibly. Use a credit card for small purchases and pay the full balance each month.
2. Avoid high-interest debt. Personal loans and credit cards can be expensive. Only borrow what you can repay.
3. Monitor your credit score. Check it for free through your bank or credit card provider.
4. Create a budget. Track your income and expenses to avoid overspending.

If you are older:

1. Watch for changes in lending standards. If lenders become more cautious, your credit limits could shrink.
2. Pay down existing debt. Lower your debt-to-income ratio to stay attractive to lenders.
3. Keep an emergency fund. This protects you if credit becomes harder to access.

Bottom line

Gen Z is driving Canada’s credit growth, with average non-mortgage debt rising 9.1% to $13,621. While delinquency rates are stabilizing, Gen Z still has the highest serious delinquency rate at 2.75%. This trend could influence interest rates and lending rules for everyone. If you are Gen Z, focus on responsible credit use. For all Canadians, stay aware of potential shifts in credit availability and costs.