Electronics retailer Circuit City (NYSE:CC) has found a buyer for its private-label credit card business. It will sell the operation to Bank One (NYSE:ONE), which is itself being purchased by J.P. Morgan Chase (NYSE:JPM).

Getting out of the credit game looks like a great move for Circuit City. Don't get me wrong. I'm not knocking the business. With half of Americans spending more than they earn each year, consumer financing can provide some serious green. Need proof? Check out the monster earnings reported yesterday by Bank One, Citigroup (NYSE:C), Wells Fargo (NYSE:WFC), and U.S. Bancorp (NYSE:USB). Heck, even carmaker General Motors (NYSE:GM) makes its real bucks through lending.

But banking hasn't been so great to Circuit City. It sold its underperforming bank card business to FleetBoston Financial (NYSE:FBF) back in November. The sale of the rest of the financing business should inject about $355 million in cash to Circuit City's balance sheets.

Investors responded with enthusiasm on Tuesday, fueling an 8% bump in the stock's price. You might forgive the overly enthusiastic reception if you consider the other recent news regarding Circuit City, which has been mostly bad. As Jeff Hwang reported, Circuit City's December sales and comps both fell in 2003 versus 2002, while bigger rival Best Buy (NYSE:BBY) shined.

Shedding the credit card distraction is another step down the right path for Circuit City. But until it can respond to challenges from Best Buy, plus discounters such as Target (NYSE:TGT) and Wal-Mart (NYSE:WMT), and generate earnings and cash flow from its retail business, the firm is still in a dark wood wandering. Investors would be wise to sit this story out until Circuit City reaches the light.

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Seth Jayson stays out of electronic stores altogether because he has no willpower.