NEW YORK (CNN/Money) - Retailers probably celebrated Tuesday's news that shoppers used their charge cards for a record number of transactions over the holidays.

Industry observers, however, were divided about whether there really is a reason to cheer.

Visa, the No. 1 payment card issuer, said spending on its Visa branded cards last week spiked about 32 percent, while MasterCard boasted the highest number of transactions ever recorded in its history for the crucial November-December holiday shopping season.

Retail consultant Howard Davidowitz said he's concerned the strong numbers belie troubling times for retailers in the months to come.

"The big picture is that we're a debtor nation but remain the most profligate spenders," said Davidowitz., president of New York-based Davidowitz & Associates.

For instance, the average U.S. household currently carries about $14,000 in credit card debt, according to Cambridge Credit Counseling Corp., a Agawam, Mass.-based non-profit consumer debt counselor that also says consumers owe a record $750 billion in total credit card debt.

"We had moderate growth in income but we're borrowing our brains out. The most concerning thing is that the level of savings is at less than one percent of personal income," said Davidowitz.

"I look at mortgage refinancing activity declining because of rising interest rates. I look at a sluggish job market and these big credit spending levels. To me it shows that consumer spending levels will not be sustainable going into next year and retail spending will soften," he said.

Swiping the cards at the counter is the easy part for consumers. But as the debts mount, it doesn't work to simply sweep all the bills under the carpet.

"What consumers don't realize is that they are spending fake money which nevertheless has to be repaid," said Chris Viale, acting president and CEO of Cambridge Credit.

"Today there are close to 30 million U.S. households, or one in four consumers, spending more than they can afford. That's because credit lines are more easily available now than in the past," said Viale.

He added, "If the high level of spending on cards over the holidays triggers more delinquencies, this could force lending institutions to start to pull back somewhat with their loose lending practices."

But some analysts said even though household debt has risen, it won't constrain consumer spending -- at least not yet.

Conference Board director of research Lynn Franco, citing Tuesday's bullish report on consumer confidence, said spending could stay at current levels at least for the early part of 2005.

Michael Niemira, chief economist with the International Council of Shopping Centers (ICSC), agreed with Franco.

"You have to be careful when assessing the impact of debt levels on future spending trends, Niemira said.

Rising credit card transactions may be worrisome, explained Niemira, but debt is still a lagging indicator of what consumers did, not of what they will do.

"If we do see a dip in spending next year, it could be because of other fundamentals playing out," he said.

A cooldown in the luxury market, for example, could become a drag on retail sales. "Some indications suggest luxury sales have topped out after seeing a run-up for the past year and a half," said Niemira.