U.S. households cut their debt last quarter, borrowing less against homes and closing credit card accounts, according to a survey by the Federal Reserve Bank of New York.

Consumer indebtedness totaled $11.6 trillion at the end of September, down $110 billion, or 0.9% from the end of June, according to the New York Fed's quarterly report on household debt and credit. Households have slashed about $1 trillion from outstanding consumer debts since the peak in the third quarter of 2008, the New York Fed said.

"Consumer debt is declining but only part of the reduction is attributable to defaults or chargeoffs," Donghoon Lee, a senior economist at the New York Fed, said in a statement. "Americans are borrowing less and paying off more debt than in the recent past. This change, which we continue to study carefully, can be a result of both tightening credit standards and voluntary changes in saving behavior."

Individuals paying off their debt crimped their cash flow by about $150 billion in 2009, the New York Fed said. Between 2000 and 2007 borrowing increased consumers' cash flow by $300 billion a year, according to the district bank.

Consumers are succeeding in improving their household finances, the report showed. Delinquency rates continued to decline, with 11.1% of outstanding debt in "some stage of delinquency," down from 11.4% at the end of June and 11.6% a year earlier, according to the New York Fed.

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