At first I thought that maybe the cards got cancelled because they weren't used--I had that happen to me. I had a ton of credit cards in college (dumb ol' me), but luckily after my sophomore year I realized that was a bit too risky. I didn't think to cancel them, I just never used them except for one. Within six months all but that one I used (most of the time paying off every month) had been cancelled with no warning and no reason.
Same thing happened when I graduated and got a job. I cancelled my college credit card because the rate sucked, applied for and received a new one, but had gotten out of the habit of using it--it was cancelled within a year, again no warning or reason.
I haven't signed up for a credit card since, I suspect it would yet again get cancelled because I wasn't using it and therefore not making the issuing bank any $$ (though I could get one through my credit union, maybe they wouldn't care?).
I am unclear in this story though...so they were using the cards, just paying them off every month in full? Or they had them and didn't use them? I know quite a few people who have had their cards yanked for paying off in full (but these are from the sucky-rate ones, where they expect you to rack up major debt.).
I don't doubt that racism could play a big factor in this (come to think of it, racism and classism runs rampant in sucky credit card deals too)...but...you don't have to be from a blacklisted country to have this happen to you. Though I doubt anyone would have the balls to ask someone with a 'white' sounding name for tax documents, ect.
The credit card franchises, credit reporting agencies, and banks have a scary amount of information about you. And with SARS I think it will not be too long before everyone's health information is in reality allowed to be used by corporate entities (airlines) to screen out undesireables.
Unless, of course, our dear Congresspeople of both parties decide to grow backbones. Fat chance of that, eh?