Credit card interest rates hit record high, topping 19%

Costs for Americans to finance their purchases on credit cards just touched the highest level on record, according to government data stretching back to the early 1970s.

Why it matters: With prices rising, Americans have been putting more on credit cards, and they're paying out the nose for the privilege.

Driving the news: The Federal Reserve's most recent report on costs of consumer credit showed average interest rates on bank-issued credit cards touching 19.1% in the fourth quarter.

  • That beats the previous record high — 18.9% — set in the first quarter of 1985.

The intrigue: While it might seem like an indicator that households are under serious financial stress, most other readings on the health of American households seem more or less fine.

  • Delinquencies on credit cards, while rising, are quite low.
  • Household debt as a share of gross domestic product is also pretty low.
  • Most importantly, unemployment is low, at 3.5% in December.

What we're watching: What banks have to say about the outlook for rising delinquencies and defaults among consumers this year when they start reporting quarterly earnings later this week.

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