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In 2007, over 1 in 200 Canadians (almost 100,000 people) between the ages of 18 and 64 resorted to bankruptcy or a consumer proposal. Canadian bankruptcy rates have increased by over 700% over the last three decades--while the population of Canada has increased by only 30%. Many economists believe that this big jump is due to increased access to credit. This theory is backed up by the fact that over 70% of the people who declared bankruptcy in 2007 had reached that point because of credit card debt.
Many retailers now make a significant portion of their profit through the interest on their own credit cards (department store and electronic store consumer credit cards typically charge more than 25% interest), and actively promote the use of their cards through point systems, discounts, and no-interest periods. Twenty years ago, it was almost unheard of for someone in university to have a credit card; now the credit card companies put up tables at colleges’ Welcome Week and offer promotional gifts to students for filling out an application form.
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