5 Smart Money Moves Millennials Can Use to Crush Credit Card Debt in Canada

If you’re a millennial juggling multiple bills, monthly rent, and a stubborn credit card balance that just won’t go away, you’re definitely not alone. Across Canada, millennials are finding themselves caught between higher incomes than their parents but also way higher expenses—from student loans to sky-high rent to inflation eating away at every paycheque. One of the most common financial traps? Credit card debt.
It’s easy to swipe now and worry later, but the reality is, high-interest credit card balances can spiral quickly. The good news? You don’t need to be a finance guru to take control. With a few realistic changes and a bit of structure, you can start making real progress toward a debt-free future.
Let’s break down what’s behind all this millennial debt in Canada—and share five proven strategies that can help you finally get ahead.

Why Are Millennials in So Much Debt?

Millennials—generally defined as Canadians born between 1981 and 1996—may earn more than previous generations, but they’re also carrying significantly more debt. According to Statistics Canada, the debt-to-after-tax-income ratio for millennials in 2016 was a staggering 216%, compared to 125% for Gen Xers back in 1999. That means for every dollar earned, millennials owe more than two dollars.
So, what’s driving this debt crisis?
A big part of the problem is that everything just costs more now—especially the things that matter most, like education, housing, and daily living expenses. While inflation has made the cost of groceries and gas noticeably higher in recent years, the real culprits for long-term millennial debt are:

1. The High Cost of Higher Education

For many millennials, getting a university or college degree wasn’t optional—it was the bare minimum to land a decent job. But the cost of post-secondary education in Canada has skyrocketed over the last two decades. Even with student loans and scholarships, many students turned to credit cards to cover tuition gaps, books, rent, or groceries.
By the time they graduate, many already have thousands of dollars in student loans—plus lingering credit card balances with interest rates often above 20%. And once you’re working and making payments, interest piles on fast.

2. Buying a Home Is Harder Than Ever

Older generations may have bought their first homes in their twenties, but for millennials, saving up for a down payment in today’s real estate market can feel nearly impossible. With average home prices still outpacing wage growth, many millennials have turned to credit cards to help cover everyday expenses while trying to save for a future home.
Even those who do manage to buy a home often do so by stretching their finances to the limit—leaving little room to pay off other debts.

3. The Millennial Wealth Gap

The richest 10% of millennials control more than half of the generation’s net worth, according to Stats Canada. That means the vast majority of millennials aren’t just trying to “catch up”—they’re playing a completely different financial game. Without family support, early investments, or high-paying careers, most millennials are forced to rely on credit to manage basic expenses.
This wealth gap makes it harder to build long-term savings or invest in assets, and easier to get stuck in a cycle of minimum payments and mounting interest.

4. Credit Cards Are Easy to Get—and Hard to Escape

Credit cards are practically handed out to university students and young professionals, often with enticing sign-up offers and cashback promises. But once you’ve used them to cover groceries, vet bills, or an impromptu trip to Banff—it’s all too easy to keep carrying that balance forward.
The average Canadian credit card balance was $4,312 in 2019, but for millennials, it’s not just the size of the debt—it’s the interest. Paying only the minimum can mean it takes years to pay off even modest balances.

5 Real Strategies Millennials Can Use to Pay Down Credit Card Debt

Okay, so now that we’ve diagnosed the problem—what can we actually do about it?
Here are five realistic, millennial-friendly strategies to pay off your credit card debt, without giving up your social life or sanity.

1. Get Real About Your Budget—And Stick to It

Before you can tackle your debt, you need to know where your money is going. Start by tracking every single dollar you earn and spend for at least one month. Apps like YNAB, Mint, or even a simple spreadsheet can help.
A popular budgeting method that works well for millennials is the 50/30/20 rule: half of your income goes to essentials (like rent, bills, and groceries), 30% to lifestyle and fun, and 20% toward savings and debt repayment.
But if you’re in serious credit card debt, you may want to flip that around—maybe 30% or more of your income goes toward debt while you temporarily scale back on other areas. The key is making sure your spending reflects your actual goals.

2. Focus on One Debt at a Time—With a Plan

Trying to pay off five different credit cards at once can feel overwhelming. Instead, pick a strategy and tackle one card at a time.
The debt avalanche method is best if you want to save money—start with the card with the highest interest rate, pay as much as possible on it, and keep making minimum payments on the rest.
The debt snowball method focuses on motivation—start with the smallest balance, knock it out quickly, and then roll that payment into the next debt. It builds momentum and can feel really satisfying.
There’s no one right approach—it depends on your personality. Choose the method that will keep you going, and stay focused.

3. Pay More Than the Minimum (Even Just a Little Bit)

It might feel like a win to make the minimum payment each month, but the truth is—it barely touches the interest, and you’ll be stuck in debt for years.
Even paying just $50 more than the minimum on your highest-interest card can make a big difference over time. Automating that extra payment can also keep you consistent and prevent you from spending that money elsewhere.
And remember—paying more than the minimum can also improve your credit score, which opens doors to lower interest loans, better mortgage rates, and better borrowing power overall.

4. Set Up Automatic Payments So You Never Miss a Due Date

Late payments don’t just hurt your credit—they can also lead to late fees and even higher interest rates. The easiest way to avoid this? Automate your payments.
Even if it’s just the minimum payment, setting up a recurring transfer from your bank account can prevent those “oops I forgot” moments. You can always go in later to add extra payments manually, but never miss the deadline.
Plus, this kind of consistency can show lenders you’re a reliable borrower—which matters more than you think if you’re hoping to buy a home or take out a personal loan in the future.

5. Consider Debt Consolidation If You’re Feeling Overwhelmed

If you’ve got multiple credit cards with sky-high interest rates, it might be time to consolidate your debt.
That could mean moving all your balances to a low-interest line of credit, applying for a balance transfer credit card, or even getting a debt consolidation loan with a lower rate and a set repayment plan.
Not only can this lower your monthly payments, but it also makes things simpler—one payment, one interest rate, and one clear payoff date.
Just make sure you read the fine print. Some balance transfer offers come with fees or short-term promotional rates that jump after a few months. If you’re not sure what’s best, talk to a certified credit counsellor or your bank.

Frequently Asked Questions (FAQs)

How many millennials in Canada have credit card debt?
A 2021 study found that nearly 9 out of 10 millennials in Ontario carried credit card debt. That’s a huge portion of a generation trying to balance modern life with high-cost living.
Which age group carries the most credit card debt in Canada?
Millennials have overtaken Gen X and Baby Boomers in average credit card debt. And because of compounding interest and lower savings, this generation is at higher risk of getting stuck in the debt cycle.
What’s the best way for millennials to pay off credit card debt?
There’s no one-size-fits-all solution, but the most effective strategies include creating a spending plan, focusing on one debt at a time, paying more than the minimum, automating payments, and consolidating debt where it makes sense.

Final Thoughts: Your Debt Doesn’t Define You

Being a millennial with credit card debt doesn’t mean you’re financially irresponsible—it just means you’re living in one of the most expensive times in history. But that doesn’t mean you’re powerless.
With a realistic plan, some smart habits, and maybe a little help along the way, you can take control of your debt—and your future. The path might take time, but every dollar you pay down is a step toward freedom.
If you’re considering a mortgage or planning your financial future, don’t let credit card debt stand in your way. Speak with a mortgage expert who understands your situation and can help you navigate your options—because good credit, like good housing, starts with smart decisions.