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.