US credit card balances jump at highest yearly rate on record

The good news is the U.S. economy is doing well and growing despite high inflation and interest rates.

The bad news is people are racking up credit card debt and falling behind on payments.

According to a new report on household debt from the Federal Reserve Bank of New York, credit card balances hit a new high of $1.08 trillion in the third quarter of the year. That’s up $48 billion from the second quarter and $154 billion from a year ago — the largest increase on record.

The data shows that more people are also falling behind on payments with the rate of households behind on payments by 90 days or more at the highest since 2011. One in 10 credit card users are in “persistent debt” meaning they pay more in interest fees each year than they pay toward principal.

The average credit card APR is over 20%.