This Day On The Street
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Typically what happened in 2005 and 2006 is homebuyers took out a loan for 100% of the value of their homes and then took a home-equity loan for 25% of the value.

"So you have 125% of the value in loans, then the house drops 10%, it makes just a great deal of sense to walk away from those," Cramer said. "But you don't want to lose your credit card. If you keep paying your credit card, your [credit] rating goes fine, so Capital One is actually in a pretty good position."

Plus, Capital One is raising the APR on its credit cards, which is "great," Cramer said. With short-term rates coming down and credit cards rate going up, "the net interest margin is just going to be gigantic."

One thing Cramer said he's not happy about is the fact that Capital One threw away $2 billion buying back its stock higher. He owned the stock for his charitable trust, Action Alerts PLUS , but decided to get out of it, breaking about even, because he lacked confidence in its mortgage business.

But now that Capital One's mortgage business has been sold, the stock has become "quite an interesting situation," Cramer said. "It's basically a pure play on credit cards, with a steady deposit base where the net interest margin is gaining.

"I would be a buyer of this stock here," he said. "That's quite a different view from everyone else."
Jim Cramer is a director and co-founder of He contributes daily market commentary for's sites and serves as an adviser to the company's CEO. Outside contributing columnists for and, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS . Watch Cramer on "Mad Money" weeknights on CNBC. Click here to order Cramer's latest book, "Mad Money: Watch TV, Get Rich," click here to order his book, "Real Money: Sane Investing in an Insane World," click here to get his second book, "You Got Screwed!" and click here to order Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column by clicking here . has a revenue-sharing relationship with Traders' Library under which it receives a portion of the revenue from Traders' Library purchases by customers directed there from
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