The nation's economic expansion, entering its seventh year, is the third-longest this century.
It has helped offset job insecurity and boosted the dollar value of many retirement and investment portfolios.
But while consumers are confident and using credit cards more than ever before, a record number are falling behind in their payments, according to reports released Thursday.
On paper, at least, Americans think they are richer than ever, even if they are not always paying their credit-card bills or rent on time.
Nearly 20 percent of all purchases now are made with credit cards, nearly triple the 7.5 percent rate of a little more than a decade ago, according to Lawrence Chimerine, managing director and chief economist of the Economic Strategy Institute in Washington.
But credit-card delinquencies also have risen, reaching a record 3.7 percent in the fourth quarter, according to a report issued Thursday by the American Bankers Association.
Chimerine, who conducted his study on behalf of MasterCard International, said late payments just indicate that credit-card usage is increasing.
"It's not that a lot of people are unable to pay - they are just late in making the payments on their bills," he said.
Credit problems or not, consumers in February continued the spending binge they began after the holidays, according to the U.S. Commerce Department.
Retail sales remained strong last month, rising 0.8 percent after shooting up a revised 1.5 percent in January, the government reported Thursday.
The better-than-expected increase sent the stock market skidding, with the Dow Jones industrial average falling 160.48 points, to 6878.89.
Investors fear that the strong economy will prompt Federal Reserve Board policymakers to tighten interest rates when they meet March 25.
"The evidence is that the economy is growing very robustly, driven by consumer spending," said Diane Swonk, chief deputy economist for First Chicago NBD Corp.
James Chessen, chief economist for the bankers group, said: "Consumers still feel that their jobs are secure and the economy is steady.
"The stock market has given them the confidence that they can take on more debt," Chessen said. "If worse comes to worse, many feel they would have the ability to pay the credit-card bills because of the strong market.
"Consumer installment debt as a percentage of market capitalization has fallen to 15 percent, compared to 27 percent in 1985," he pointed out.
Chessen also said banks are better able to handle the late payments or defaults than in the past.
On Thursday, the Federal Deposit Insurance Corp. reported the nation's commercial banks earned a record $52.4 billion in 1996.
Banks now have the ability to write off every noncurrent consumer and business loan and still have $24 billion in reserves without touching the $375 billion in capital that they have built up since 1990, according to the bankers association economist.