In a recent survey, 27 per cent of millennials said they spent more than half of their disposable income using credit cards, compared to 16 per cent of boomers.
Ninety-five per cent of millennials reported having at least one credit card, compared to 80 per cent of boomers. While boomers were pretty much evenly split between cash back, travel reward and low-interest cards, millennials strongly preferred cash back and travel cards.
Here's why these numbers caught my eye. In the latest quarterly update on borrowing levels from the credit agency Equifax Canada, people between the ages of 26 and 35 posted the largest year-over-year increase in average debt. The average non-mortgage debt for this demographic was $17,314, up 4.5 per cent. On average across the entire population, debts increased 2.8 per cent.
There's been a lot of attention in recent years on how seniors were leading the population in debt growth. Millennials, with their avid use of credit cards, have at least temporarily taken over top spot. It's a trend that bears watching.
Subscribe to Carrick on Money
Are you reading this newsletter on the web or did someone forward the e-mail version to you? If so, you can sign up for Carrick on Money here.
NEW: Get the Real Estate newsletter, covering the housing market, mortgages, deal closing, design and more. Sign up here.
Housing affordability in five steps
Wondering whether you can afford to buy a house? Try this thorough process for working through both the math and the emotional side of things.
Here's what happens when a city's housing market gets too expensive
I keep hearing stories about young adults priced right out of the Toronto housing market. Where do they buy instead? One spot is nearby Hamilton, a city that the writer of this article used to think of thusly: "In my mind, Hamilton was to Toronto what a backyard shed is to a house – a gritty appendage, perhaps, but not a place you want to hang out."
A big brother for the toonie and loonie
There are signs the Royal Canadian Mint is looking at replacing $5 bills with a new coin. Bring it on. I throw all my change in a jar and this would accelerate my savings a lot.
Have you tried the bamboo toothbrush?
Me, neither. But it appears on this list of 25 ways to reduce waste at home. Bamboo toothbrushes are compostable.
Today's featured financial tool
Here's a calculator that shows you the interest rate equivalent of the yield from a dividend stock. In non-registered accounts, interest is taxed more heavily than dividend income. As a result, a bond has to pay substantially more than a dividend stock to generate equal after-tax income.
The question: "We are value investors, waiting for a market correction. While we wait, we would like our cash to be earning interest. We are fine with 1- to 1.5-per-cent rates. I know of several "high-interest" savings accounts, but this money is sitting in our TFSAs and RRSPs. I can't seem to find any high interest savings vehicles that I can buy on our trading platform under these tax shelters. Is there such a thing? If yes, how do we find it?"
The answer: "The best rate I can find on investment savings accounts available through investment dealers is the 0.8 per cent from B2B Bank's High Interest Investment Account. If you were willing to move the money to a TFSA at another financial institution, Alterna Bank is offering 1.9 per cent."
Do you have a question for me? Send it my way. Sorry I can't answer every one personally. Questions and answers are edited for length.
What I've been writing about
-How high debt loads are hurting our children
-Wavering on Home Capital high-interest GICs? Buffett's got your back (for Globe Unlimited subscribers).
Thoughts on the best travel rewards program.
More Carrick and money coverage
Send us an e-mail to let us know what you think of my newsletter.
Want to subscribe? Click here to sign up.