NSW households have turned their back on credit cards, slashing card debt by 20 per cent and trimming the number of cards owned. And, it was all done in the pre-Christmas period – traditionally a time of big card spending.

The state’s median level of card debt has fallen from $2,103 in Q3 to $1,651 in Q4 – a drop of 21 per cent. In addition to paying off their cards, NSW households are reducing the number of cards held – down from 2.1 per household in Q3 to 1.8 in Q4.

One in three NSW households say the economic downturn was a reminder of the importance of paying off debt as quickly as possible. Reflecting this, NSW residents took a cautious approach to festive spending – 80 per cent were able to avoid dipping into their savings to fund Christmas purchases.

ING Direct chief executive Don Koch said “It’s great to see NSW households make such impressive inroads into credit card debt. The state’s median card balance of $1,651 is below the national median of $1,773.

“The credit card clamp down is all the more compelling because it occurred in the pre-Christmas period when many households traditionally overload their credit card with festive season purchases.

“On the downside, only 44 per cent of NSW households are happy with their mortgage, and over one in four (26 per cent) home owners are thinking about refinancing.”

The quarterly financial well-being index rates comfort levels across six key aspects of household finance including credit card and mortgage debt, savings, investments, household income and ability to pay bills. Respondents rated their comfort level from 1 ‘very uncomfortable’ to 7‘very comfortable’.

In the fourth quarter of 2010, household financial wellbeing in NSW remained stable. The index held steady at 108 between Q3 and Q4.