"Consumers have more money in their pockets to spend, which should be positive for the economic recovery going forward," said Gennadiy Goldberg, an economist at TD Securities.
US households built up a massive debt load as the housing bubble expanded and efforts to pay down those debts have been a restraint on spending and the economy's recovery.
The debt service ratio, which takes into account outstanding mortgage and consumer debt, peaked in the third quarter of 2007, shortly before the economy tipped into recession.
The Fed has sought to help consumers dig out by keeping interest rates near record lows. It has held overnight rates near zero since December 2008 and has bought around $2.4 trillion in bonds to further lower borrowing costs.