The credit card companies will eventually get their money - it will just be painful for them. They have to send a bunch of warnings, get a collection agency inv

The credit card companies will eventually get their money - it will just be painful for them. They have to send a bunch of warnings, get a collection agency involved, and so on. If somebody goes bankrupt the CC company won't get its money back, so the rates then become irrelevant. You argue that the pain to the credit card companies will ultimately end up at the doorstep of those who do pay off their debt. And to some extend, that's true. But I don't think it's as bad as you make it sound. Let's take an analogy. When amazon offers free shipping, are you upset when you live close to their distribution center so that you (effectively) pay a higher price for the product? After all, the money for the shipping has to come from some place, and if shipping to your house is relatively inexpensive, then you're subsidizing the shipping costs of others. It's not really something anybody would worry about. Implicitly subsidizing others happens all the time, and I think that it averages out pretty well. Besides, when people go bankrupt because they borrow money irresponsibly, the society as a whole also suffers. So preventing unnecessary bankruptcy is a good thing. And CC companies make it hard for people to get higher caps on their CC to minimize their own risk. And everybody benefits from that.