Generation Y - people aged under 30 - is financially illiterate and sees credit as a way of life.
That's the view of credit managers and insolvency experts who are witnessing a huge rise in loan defaults and bankruptcies among this age group.
People aged 20 to 29 account for the largest rise in bankruptcies over the past three years, the Insolvency and Trustee Service says.
Numbers of people in this group made bankrupt have risen almost 30 per cent since 2004.
People aged 30-49 account for more bankruptcies, but the increase in these age groups over the same period is around 18 per cent.
Meanwhile a survey by Veda Advantage has found that Generation Y - which it defines as people aged 18 to 27 - is now responsible for a third of all loan defaults listed with the credit information agency. Country manager John Roberts said Generation Y-ers were also defaulting on their loans 33 per cent more often than they were last year.
"The Gen-Y group are the 'I want it now' generation," he said. "This group these days are saying, 'Look, I've got the disposable income, there's really low unemployment... I'm living for the day as opposed to tomorrow, so if I want the iPod now, I'll go buy the iPod.
And if I haven't got the cash, then I'll simply borrow the money'."
He said they were getting themselves into some "dreadful" situations as a result - 15 per cent of loan defaults by the under 27s were for monthly accounts such as telephone and utility bills.
"What a lot of young people don't understand is that there is going to be a credit file at our bureau for them.
"If they do default and it gets listed on their credit file... that's going to sit there for five years."
Roberts said that may impact on whether banks and other lenders will lend to them in the future, and at what interest rates.
He said it was not uncommon for a young person to have eight credit inquiries on their file in a year - meaning they had applied for eight different loans, hire purchases or credit cards.
He said they often came out of university with a large student loan, then borrowed to buy a car, plus toys such as a stereo system and a wide-screen television.
Budgeting services say they now see a lot of Gen-Y clients. Glenys Michael of Auckland Central Budgeting said a typical client might have $20,000 in hire purchases.
"They see two years interest free, but they never think of paying it off before that two years is up."
She saw a client two weeks ago who, despite a monthly income of $6000, had racked up $100,000 in debts.
Ross Van Der Schyff, manager of the Insolvency and Trustee Service, said the government agency couldn't explain the large rise in bankruptcies among 20 to 30-year-olds. However, he hoped changes to the Insolvency Act, due to come into effect on December 3, would provide alternatives to bankruptcy.
The changes include a new category for debtors owing less than $40,000 - the 'no asset procedure', under which they can have their debt written off. The debtor only qualifies once for the privilege and cannot have been previously bankrupt.
The level of debt at which a person can apply to make 'summary instalments' over three years is also being raised, from the current $12,000 to $40,000.
Peter Hattaway, a credit management expert who is running seminars on the new law, was not surprised by the rise in bankruptcies.
"In English bankruptcy law you used to have people's ears nailed to the stocks when they went bankrupt.
"Over time the stigma and the penalties get less and less... The more people that you know that have got debt problems and have gone bankrupt, the less of a disaster you see it as."
He was not impressed with the law changes.
"In a sense it's rewarding the people who are the most hopeless cases."
Escaping the debt trap
Auckland retail manager Reggie Tabaquero has learned the Generation Y spending lesson the hard way.
The 26-year-old told the Herald on Sunday impulsive shopping habits had nearly seen her personal debt spiral out of control. "If I see anything that grabs my eye I just buy it straight away."
It was only thanks to assistance from her parents that she got out of her financial hole relatively unscathed, she said.
Scoping out the sale at Superette in Newmarket when we spoke to her, Tabaquero said she got her first credit card at 18 - without realising how difficult it could be to pay back.
By 22 she owed $5000 on three cards, a debt she just couldn't shake, and which threatened to continue to grow.
Tabaquero hasn't used a credit card since the parental bail-out.
"I cut them up."
It's too easy for young people to get swept up in a consumerist society, she believes. Her friends all have credit cards and owe an average of about $2000.
"In this generation it's all about what you've got, for example, everyone's got an iPod. If you don't have it you find a way to get it, either you keep begging your parents or you get a loan."
Now living within her means, Tabaquero has no other loans or hire purchases, and has a debit card for when she travels. But does she miss the plastic?
"Yes, and no. Whatever I earn, that's my money, and I don't have debts."
"I've been there, done that, not going to go back again!"