Charge cards rule--retirement be damned.

A line forms in front of the cashier at the corner sundries store as office workers, clutching their sandwiches and drinks, wait to pay and have their lunch. The backup can mean only one thing: Somebody is paying by credit card. The charge? A lousy four bucks.

That's how far electronic bill paying has reached, as more consumers choose plastic not only for the bigger transactions--department stores, supermarkets, etc.--but for most any sized payment. Last week, the Federal Reserve affirmed as much in reporting that paper checks had been finally overtaken by credit and debit cards. In 2003, the number of such electronic payments totaled 44.5 billion, while only 36.7 billion checks were written.

The interesting twist is that those checks had a total value of nearly $40 trillion, while the electronic payments totaled only $27.4 trillion. That would suggest consumers are more likely to use credit cards than cash, while still opting for checks when it comes to the bigger non-retail payments (mortgages, car loans, even credit card bills). At the corner sundries store, no one pays by check.

We all love our credit cards, of course, and it's easy to see why. They are easy to get. They are exceedingly functional (unlike the days when merchants would have to pull out the imprint machine and call the credit card company to verify your number). Only a token payment is required (along with interest charges). And last but not least, there are all those airline miles.

What credit cards also do, however, is detach consumers from the act of purchasing something, a criticism that goes back to the 1950s when plastic started out as mere paper. Since then, technology has become an even bigger part of this detachment--specifically, the ability to complete a credit card transaction within a matter of seconds. For retailers, the speed of credit is a powerful instrument.

Too bad the bills eventually come due. And need we be reminded that credit card debt in this country has reached an astounding average of $9,200 per household. Each year, those households pay out $1,100 in interest and fees. No wonder the nation's savings rate is hovering at an all-time low.

Credit cards nurture a society that's hell-bent on spending, not saving. To a large extent, spending helps our economy work, especially this time of year, and it's routinely credited with preventing the last recession from getting out of hand. But Americans have a tough time doing anything in moderation, which is why so many of us are approaching retirement with very little in the kitty.

Good luck talking moderation to anyone under 30 (maybe even 40), although given the current debate about the future of Social Security, it's time they started to pay attention.

Here's the Cliffs Notes version: The first wave of baby boomers are about to enter retirement and as the over-65 population nearly doubles over the next 30 years, there simply won't be enough money on hand--at least not without big changes. That's because current Social Security recipients are being paid by the taxes of folks now working. The arrangement is acceptable for the time being, though with the workforce steadily declining and retirees steadily increasing, the numbers eventually won't pencil out.

They'll have to restructure the thing, all right, and that will mean either higher taxes or reduced benefits--not a palatable prospect if you're a politician. Just last week, President Bush said he wouldn't allow payroll taxes to be raised to fund his proposed overhaul.

So Social Security and Medicare funding are drying up and the federal budget deficit is out of control and the nation's savings rate is near rock bottom. Meantime, everyone keeps charging with nary a thought or a worry. Not to sound alarmist, but something's gotta give.

Mark Lacter is editor of the Business Journal.