The average age of consumers falling into debt has fallen from 42 to 34 in the last five years, a debt management company said on Wednesday.
"This latest data is by far the most worrying, as it shows that it is the younger generations who are getting into trouble with debt, and getting into trouble quickly," DebtBusters spokesman Ian Wason said.
Nearly 50% of all credit active consumers were struggling with debt repayments.
"From a macro-economic point of view, the credit providers are effectively taking these crucially important consumers out of the economy."
Wason said once a young person had too much unsecured debt, they were unlikely to ever be able to buy a house, start a business, or save for the future. In recent years, unsecured credit had been growing at rates of up to 40 percent.
"Unfortunately we can see very little evidence of this money being used for anything other than consumption."
People were spending more than they earned, and this could only end in a debt spiral, with consumers taking out increasingly expensive loans to keep up with existing loan repayments.
"DebtBusters implore credit providers to perform more stringent checks on their clients before they lend, to implement some form of percentage cap on net income to debt repayments."
