[CWuestefeld]

You make a good point, but I don't think it's completely correct.

I think what you're missing is that the period of the loan from the CC is also open-ended. With a conventional loan, the lender knows that he'll be repaid (i.e., risk goes to 0) at the end of the term (30 year mortgage, 5 years for a car, etc.).

With the CC, the borrower may be holding those funds pretty much forever. This means that the lender is assuming more risk: first, that at some point way down the road the borrower will default; and second, that changes in the cost of capital make the CC "loan" unprofitable. This latter risk is much more acute today, precisely because interest rates are so low. If the CC rate is calculated to be profitable based on (e.g.) today's prime rate, then there's every possibility that 10 years down the road it's going to be a lousy deal for the CC company.

So as I said (but not for precisely my original reasons) you're putting more risk on the CC company. And the CC company has to recoup the costs of that risk somehow.