The first increase in the Bank of Canada's interest rate in seven years is just a quarter of a percentage point from 0.5 percent to 0.75 percent.

It's a sign that the central bank believes the Canadian economy is strong enough to grow without any extra incentives.

But what is good news for savers may not be good for borrowers.

Financial planner Daniel Thompson pointed out that Canadians have been living with rock-bottom interest rates for a very long time, and have become very used to cheap credit.

"Canadians are up to their necks in debt right now and they seem to be borrowing, to borrow, to finance more borrowing, to finance more borrowing, whether it's a house or a car or a luxury item or whatever it is," said Thompson.

"It always ends badly in terms of a credit bubble in terms of borrowing too much, so they're firing a shot across the bow, so to speak, and saying cool down on the borrowing."

While growth in past years has been fuelled by borrowing and spending, Finance Minister Stephen Poloz now believes other sectors of the economy are doing well, including exports.

"I know not everybody will think a higher interest rate is good news but it's a symptom of an improving economy," said Poloz.

Consumer protection group Option Consommateurs said the rate hike is a warning sign for Canadians who have taken advantage of easy credit.

Sylvie De Bellefeuille said people with financial problems should stop borrowing, make a budget, and start saving money.

"One can lose a job, one can get sick and not be able to work, these types of events can have a catastrophic impact on the budget," said De Bellefeuille.

Recent surveys indicate many Canadians doubt they would be able to maintain their lifestyle if interest rates rose one percentage point.

The rate hike, minor as it is, was swiftly noted by Canada's big banks.

Five banks, including RBC, BMO, TD, Scotiabank, and CIBC all increased their prime lending rate from 2.7 percent to 2.95 percent

Those with variable mortgages will be paying more, with the interest on a $300,000 mortgage increasing by about $40 per monthly payment, however realtors do not believe the increase in the cost of borrowing will affect the housing market.

"Right now, just to give you a statistic, the number of listings for sale has never been this low since 2012 and in 2012 there were bidding wars," said Bill Palmer, a realtor with Sutton Group.

Thompson said the mild increase is a warning sign for consumers to get their affairs in order.

"There's a lot of people living paycheque to paycheque. And believe it or not, they're still borrowing money. They're still able to borrow money. They're still able to go out and get another car," said Thompson.

He doesn't think rates will shoot up in the near future, but believes Canadians have become complacent about being in debt.

"We're in a generation now where people can't even remember it cost 10 percent for a mortgage or 15 percent to borrow to buy a car," said Thompson.

"Get it under control. If you're carrying too much debt start paying it down."

Meanwhile higher interest rates are a boon for those Canadians who have been saving, such as seniors on fixed incomes.

Jimmy Jean, a senior economist with Desjardins group, said savings accounts and GICs have been generating marginal incomes in recent years.

"People have suffered in recent years from very low interest rates," said Jean.

Following Wednesday's hike many economists expect another rate hike will happen later this year, but only in September or October.