Only Seven Percent of Americans to Use Tax Refunds on 'Fun' Activities

5 Apr 2010 13:00 Africa/Lagos

Only Seven Percent of Americans to Use Tax Refunds on 'Fun' Activities

New Bankrate poll reveals how the American consumer is planning to use tax refunds this year

NEW YORK, April 5 /PRNewswire-FirstCall/ -- A new study released by Bankrate, Inc. shows that, with economic uncertainty still lingering, many Americans plan to use their tax refunds in a fiscally conservative fashion, with 84 percent intending to pay down debt, save or invest, or use it for everyday necessities. The poll, conducted by Princeton Survey Research Associates International, can be seen in its entirety here: http://www.bankrate.com/finance/taxes/how-americans-will-spend-their-tax-refun d-1.aspx.


(Logo: http://www.newscom.com/cgi-bin/prnh/20040122/FLTHLOGO )

Among the findings:

-- Fifty-five percent of Americans polled expect to get, or have
received, a tax refund this year while 24 percent expect to owe;
-- While 84 percent plan on using their money to pay down debt, save,
invest, or use the refund for everyday necessities, only seven percent
plan on using their money on "fun" activities like shopping or taking
a vacation;
-- Within that 84 percent of fiscally conservative Americans, 30 percent
intend to pay down debt, 28 percent say they will save or invest, and
26 percent anticipate spending their refund on food or utility bills;
-- While just three percent of those getting a refund took a refund
anticipation loan, among people with incomes under $30,000 that number
is doubled at six percent;
-- Only 19 percent of Americans plan to adjust their paycheck withholding
to avoid a big refund next year while 71 percent plan on keeping their
withholding the same;
-- Among those who anticipate owing money, 63 percent plan on paying
their taxes straight from their bank accounts. Only 6 percent
anticipate borrowing money to pay off their tax bill;
-- Additionally within those who owe money, 17 percent plan on setting up
an installment plan with the IRS. But be warned, setting up a plan
with the IRS includes interest, late fees, and a user fee to begin
installment payments.


"Since a tax refund is often the biggest windfall many Americans receive all year, it is imperative to use it wisely," said Greg McBride, CFA, senior financial analyst for Bankrate.com. "Padding emergency savings, establishing or boosting an IRA, and paying down high interest rate debt are all great uses. But go one step further and adjust your paycheck withholding so you're not giving an interest free loan to the government in 2010 also."


This national random-digit-dialed phone study of 1,002 adults 18 or older was conducted for Bankrate by Princeton Survey Research Associates International. The sample was weighted by demographic factors including age, gender, race, education and census region to ensure reliable and accurate representation of adults in U.S. households. The overall margin of error for the survey is +/- 4 percentage points based on the total sample.


About Bankrate, Inc.


The Bankrate network of companies includes Bankrate.com, Interest.com, Mortgage-calc.com, Nationwide Card Services, Savingforcollege.com, Fee Disclosure, InsureMe CreditCardGuide.com and Bankaholic. Each of these businesses helps consumers to make informed decisions about their personal finance matters. The company's flagship brand, Bankrate.com is a destination site of personal finance channels, including banking, investing, taxes, debt management and college finance. Bankrate.com is the leading aggregator of rates and other information on more than 300 financial products, including mortgages, credit cards, new and used auto loans, money market accounts and CDs, checking and ATM fees, home equity loans and online banking fees. Bankrate.com reviews more than 4,800 financial institutions in 575 markets in 50 states. In 2008, Bankrate.com had nearly 72 million unique visitors. Bankrate.com provides financial applications and information to a network of more than 75 partners, including Yahoo! (NASDAQ:YHOO) , America Online (NYSE: AOL) , The Wall Street Journal and The New York Times (NYSE:NYT) . Bankrate.com's information is also distributed through more than 500 newspapers. Bankrate, Inc. was acquired by Apax Partners, one of the world's leading private equity investment group, in September 2009. Apax operates across the United States, Europe and Asia and has more than 30 years of investing experience. For more information on Apax, visit: www.Apax.com.


For more information contact:

Chris Spagnuolo
Public Relations Manager
cspagnuolo@bankrate.com
(917) 368-8671

Photo: http://www.newscom.com/cgi-bin/prnh/20040122/FLTHLOGO
AP Archive: http://photoarchive.ap.org/
PRN Photo Desk, photodesk@prnewswire.com
Source: Bankrate, Inc.

CONTACT: Chris Spagnuolo, Public Relations Manager,
cspagnuolo@bankrate.com, +1-917-368-8671


Web Site: Bankrate


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