People keep getting


(MA) - Get Mastercard Inc. (MA) Report

wrong, Jim Cramer said on TV's Wall Street Confidential Web video Wednesday. They've been using it as a proxy for American consumer spending, but that is a small part of its story.

"The story here is that people worldwide are adopting credit cards," he said. "The credit card is being invented all over, whether it be Southeast Asia, Latin America or Eastern Europe, and MasterCard is the play."

This adoption of plastic over paper is really driving the stock, and more than half of the company's business is from overseas, Cramer explained. U.S. consumer spending is a secondary factor.

A fifth of the stock is short, and the company is buying back what could possibly be a fifth of the company, Cramer explained. Therefore, "two fifths of the company are going the wrong way, and that's why the stock has gone up 17%," Cramer said. "It's a thin trader to begin with."

Watch Cramer's Riff on MasterCard

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Cramer typically doesn't like to recommend stocks because of the shorts having to scramble, because periodically the shorts are going to be right, he said. However, MasterCard is just a classic example of what he said he's seen over and over again in his career, and that is that people don't know what they are shorting.

"They are shorting a concept, not a company," Cramer said. "MasterCard is the master at delivering the earnings, so you can't look for a shortfall or expect one."

He believes people were emboldened by

TheStreet Recommends

American Express'

(AXP) - Get American Express Company Report

"just OK quarter" to short more MasterCard. But people should understand that American Express is very different, Cramer said.

While MasterCard is a pure play on the secular growth of credit cards, American Express is a wealthier play on upscale consumer spending.

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

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