5 Money Tips for Millennials To Pay Down Credit Card Debt (Canada 2025)

Category: Financial Wellness
Tags: Millennials, Credit Card Debt, Budgeting Tips, Debt Consolidation, Canadian Finances

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Let’s be real — if you’re a Canadian millennial drowning in credit card debt, you’re far from alone.

Between rising living costs, sky-high tuition, and stagnant wages, it’s no surprise that millennials are carrying more debt than any generation before them — even though they earn more. But here’s the good news: with a few strategic moves and a bit of discipline, you can tackle your credit card balances and finally breathe easier.

So let’s talk about how you got here — and more importantly, how to get out.

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Why Are Millennials in Canada So Deep in Debt?

Even though many millennials earn more than their parents did at the same age, they’re still struggling financially. That’s because wages haven’t kept up with the rising cost of essentials — especially housing and education.

According to Statistics Canada, millennials had a debt-to-after-tax income ratio of 216% back in 2016 — nearly double that of Gen X at the same stage of life. And with interest rates rising, that gap is only widening.

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1. Tuition Keeps Climbing

Let’s start with school. Canadian university tuition has more than doubled in the past 25 years, pushing many students to rely on loans and lines of credit just to graduate. And the problem doesn’t end after convocation — those loans snowball with interest.

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2. Owning a Home Feels Impossible

In cities like Toronto and Vancouver, even a starter home can cost more than $1 million. Millennials are being forced to take on larger mortgages — or stay out of the market altogether — often turning to credit cards to bridge the gap on rent and living expenses.

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3. The Wealth Gap Is Real

Stats Canada reports that the top 10% of millennials own over half of the generation’s total net worth. If you’re not born into wealth or real estate, chances are you’re falling behind — and possibly relying on credit just to maintain a basic lifestyle.

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4. Credit Cards Fill the Gap — Until They Don’t

The average Canadian carries over $4,300 in credit card debt. But millennials? They’re leading the pack. With less room to save and more emergencies to cover, credit cards often become the fallback — and that interest adds up fast.

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5 Smart Tips to Crush Your Credit Card Debt in 2025

Let’s break this down into real, doable steps:

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1. Build a Simple Budget Using the 50/30/20 Rule

You’ve probably heard of it — because it works.

• 50% of your income goes to needs (rent, food, bills)
• 30% to wants (Netflix, brunch, trips)
• 20% to debt repayment and savings

Use a budget tracker app to categorize your spending, and trim the fat where you can. If you spend $250/month on Uber Eats, even halving that could redirect $125 to your debt.

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2. Pick a Payoff Strategy: Avalanche vs Snowball

Two tried-and-tested methods:

• Avalanche: Pay off your highest-interest cards first (saves you the most money).
• Snowball: Pay off your smallest balance first (quick wins = big motivation).

Choose what suits your personality best — the key is consistency.

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3. Always Pay More Than the Minimum

If you’re only paying the minimum on a $4,000 balance at 20% interest, it’ll take years to pay it off. Even an extra $50–$100 a month can shave off months of payments and hundreds in interest.

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4. Never Miss a Due Date

Late payments wreck your credit score and lead to penalty interest. Set up auto-pay or at least calendar reminders. Every on-time payment builds a better financial profile — which means lower rates when you finally apply for a mortgage or loan.

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5. Consider Debt Consolidation

If you’re juggling 3–4 credit cards at 18–22% interest, it might be time to roll them into one lower-interest loan. A consolidation loan or balance transfer can:

• Simplify your payments
• Save on interest
• Speed up your payoff timeline

Just make sure to read the fine print and watch for fees or teaser rates that jump.

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Frequently Asked Questions

Q: What percent of Canadian millennials are in credit card debt?
A: Over 87%, according to a 2021 Ontario study. It’s one of the top financial burdens for this generation.

Q: Who carries the most credit card debt by age?
A: Millennials top the list, followed by Gen X. Many boomers have paid theirs off or use credit more cautiously.

Q: What’s the fastest way for millennials to pay down credit card debt?
A: Start with budgeting, pick a debt strategy (avalanche or snowball), pay more than the minimum, and explore consolidation if needed.

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Final Thoughts: Your Debt Doesn’t Define You

It might feel like you’re buried, but debt isn’t forever. By taking small, smart steps today, you can change your financial trajectory.

Remember — you’re not failing; you’re just figuring it out. And every payment you make is progress. 💪

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