[highball]

Why would I not be surprised if these credit cards were being insured by 'we' taxpayers, courtesy of our congress?
I don't know this to be fact, but I wouldn't be surprised.

Must be.

I was wondering why any for-profit institution, with shareholders to which it must answer, would do something so stupid. No credit history? No way to track cardholders and no way of holding them accountable? What halfway rational bank would extend them credit?

Your answer makes sense.

[JasonC]

They don't need them to be insured. They create the money they pay out - that is what banks do for a living. Money is the debt of a bank. So they run around looking for debts they can sign their name to, to literally make more money.

Sure they also want to be paid back. Between a 30% interest rate on defaults, collection agencies, 18% on non-defaulting customers who carry a balance, and up to 3% of the purchase price (maybe 1% shared with Mastercard or whoever), they get paid.