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Originally Posted by $5 submissions
From a rational business perspective, I agree with you. However, given the recent "the banks should not have lent to me" mortgage meltdown fingerpointing in the US, this logic might extend to even credit card debt.
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Banks don't want people to stop using credit or stop getting new credit.
However, just as when you get a credit card and it has a maximum limit on it, the bank has a maximum amount of credit they can offer their customers, based on parameters determined by deposits, set aside capital, etc. If you are a customer of Bank A, and you have a 10k card you are not using, you are not doing them any favors. They cannot offer someone else that 10k in credit while you still "own" it. So they cut you off and get someone else who will use it.
They just hope the person using it will pay it back. Over time. With interest.