(FORTUNE Magazine) – It would seem rather obvious: Running up on credit-card stocks right now can't be a good idea. After all, the market is glutted with cards, and issuers are struggling to find new areas of growth. Worse, of course, is the economic picture: Americans have cut back on their use of plastic for the first time in almost ten years. With layoffs mounting, late payments have soared to record levels. Losses from uncollectable debt, known as "charge-offs," have reached 6.5% of outstanding loans. That's up from 5.1% a year ago.

So why are a number of smart contrarians saying that it's a great time to buy? For starters, the stocks are cheap. As a group, consumer financials now trade at a 50% discount to the S&P 500--far below the usual 15% discount, notes Elaine Garzarelli, manager of the Forward Garzarelli Equity fund, who upgraded the sector in October. And there are a couple of companies that have found a way around the economic morass.

Topping many analysts' recommended list is MBNA, the world's largest independent credit-card lender. The company, based in Wilmington, Del., issues cards in conjunction with such organizations as the National Football League, the National Education Association, and the Georgetown University Alumni Club--relationships that have helped forge an extremely loyal and lucrative customer base. MBNA's typical cardholder has a household income of $64,000 and a 16-year history of good credit. Substandard applicants simply don't make the cut: Fewer than half of all applicants even qualify for a card. While MBNA's credit losses may rise slightly as recession kicks in, analysts expect them to remain at manageable levels, below the industry average. The stock trades for 14 times next year's expected earnings, a substantial discount to the 20% long-term earnings growth analysts forecast.

Capital One Financial is just as tough with its customers. The Falls Church, Va., company mines huge consumer databases, checking credit risk, card usage, and other characteristics, and then matches customers with the right credit cards. The research has paid off: The firm's charge-off rate was just 3.9% in the third quarter. Analysts expect long-term profits to grow 24% a year; the stock, at $45, trades for just 13 times next year's earnings.

But not all stocks in the sector are expected to escape the recession unscathed. Providian Financial has aggressively courted "subprime" customers, i.e. those with poor credit histories. The company stunned Wall Street in October when it posted a 71% drop in third-quarter profits amid rising customer defaults. Its credit-loss rate reached 10.3%, and it announced it would look for a new CEO. So while aggressive card outfits still look risky, investors may get extra credit for snapping up quality lenders now.

--David Stires