You'd think investors would stay away from credit card companies these days. Credit card lenders (Advanta, American Express, Bank of America, Capital One, Chase, Discover) are losing piles of money this year as borrowers default at record rates -- roughly 10% and rising.

But the Visa and MasterCard payment systems, which connect card users, stores, and their respective banks, are protected from the worst effects of the slowdown. They don't make loans; banks do that. But they still get a cut of every credit and debit card transaction that runs through their card networks. They get paid, even when a borrower defaults.

Card use (and thus payments to Visa and MasterCadr) is still rising, despite the slow economy, partly because governments are putting benefits on cards, reducing their value to consumers but making card companies richer.

"It is rare to find a large cap company that can grow 20% per year during a recession," while still posting operating margins above 50%, Janney Montgomery Scott analysts Thomas C. McCrohan and Leonard A. DeProspo tell clients today in a report urging them to buy Visa.

True, growth has slowed from the red-hot rates of the mid-2000s; card-use fees (interchange) "are poised to decline" due to competition abroad and "the growing hostility towards the credit card industry in Washington DC;" and a suit by outraged merchants tired of paying a couple of pennies off every dollar is working through the federal courts.

But McCrohan and DeProspo figure Visa can preserve its high profit margins by cutting back on its enormous marketing and advertising campaigns, and waiting til the economy recovers. "Visa spent more than $400 million on consultants last year," McCrohan told me. Visa can afford to "fire the high-priced consultants," and consolidate its regional offices, to protect profits.

Not so Visa's smaller rival MasterCard, which they rate "neutral" due to "decelerating volume growth" that slowed to 12% last year. They expect MasterCard will cut prices, but it still won't catch market leader Visa. Even though (or maybe that's why) MasterCard, at 17x earnings, looks cheaper than Visa at around 24x.