They will not conduct any further underwriting review or re-evaluation when you decide to actually exercise the card and have them make the loan.

Sure. They use your credit history to determine that. Which, of course, affects the limit they offer you. In some extreme cases, it isn't really a credit card...as I recall, you put your own money up, and it's almost a debit card (usually to help you establish a good credit history).

I do get your point. It is, as you said, an unsecured loan based on your history. It is apriori approved (again, based on your history), and if you're bad, they can have a vendor keep the card (if I can believe what I've seen in some TV programming).

It seems to me the risk is more when someone gets your card number. They've vetted YOU. But some miscreant gets your card number and starts charging up a storm. The banks cover you, so you're not on the hook, which is a loss for them.