One Third of Americans -32%- Spent Refund Checks from Bush Tax Cuts, According to the Cambridge Consumer Credit Index

ISLANDIA, N.Y.--(BUSINESS WIRE)--12/08/2003--One third of Americans (32%) spent refund checks they received earlier this year from President Bush's tax cut package on purchasing consumer goods, according to the Cambridge Consumer Credit Index. 20% of Americans used the money on everyday purchases, while 10% spent on "something they always wanted to buy" and 2% used the money for other kinds of purchases. Of those surveyed, 18% deposited the refund checks into savings accounts. Almost half, or 48%, used the money to pay off bills including credit cards (15%) and other bills (33%). Only 2% invested the money in stocks, bonds or mutual funds.

Of the total respondents, 32% of Americans received tax refunds this year, while 68% did not receive any refunds as a result of the income tax cut legislation.

In February 2003, in anticipation of the tax cuts, the Cambridge Index asked Americans what they would do with the money if they got a refund check. At that time, 28% said they would save the money in a bank account, 23% planned to use it to pay off bills, 19% expected to use it to pay off credit card debt, 9% would spend it on everyday items, 9% would purchase things that they had always wanted to buy, 6% spent the money in other ways and 6% planned to invest in stocks and bonds.

Here is the comparison of the February and December tax refund questions: 

What would you (or did you) do with the tax refund check you will (or did) receive:

                                                       December 2003  February 2003

Pay off bills                                              33%                  23%
Spend on everyday items                          20%                   9%
Save in a bank account                             18%                  28%
Pay off credit card debt                             15%                  19%
Buy something always wanted                   10%                   9%
Other spending                                          2%                   6%
Invest in stocks and bonds                         2%                   6%

"By comparing what Americans thought they would do with tax refunds to what they actually did, it is clear that people spent more and saved and invested less than they had anticipated. In February, 72% of consumers expected to spend any tax refund they might get on consumer goods, bills or credit card debt, but by December, 80% of consumers had spent their refunds. In contrast, in February 34% of Americans expected to save or invest their refunds, while by December only 20% actually did so," says Jordan Goodman, spokesperson/financial analyst for the Cambridge Consumer Credit Index.

These findings are the result of monthly nationwide telephone poll of 1000+ adults conducted by ICR/International Communications Research in the past week, sponsored by The Debt Relief Clearinghouse.

For more information about the Cambridge Consumer Credit Index, contact media relations representative Paramjit Mahli at mailto:pmahli@cambridgeconsumerindex.com or 631-786-6450, or economist Allen Grommet, who provides an economic analysis of Index results, at agrommet@cambridgeconsumerindex.com or 800-804-0575, or the Index website at http://www.cambridgeconsumerindex.com/. Consumers wishing to find out more about Debt Relief Clearinghouse referral services should call 1-888-4DEBTHELP or visit http://www.debtreliefonline.com/.

CONTACT: Cambridge Consumer Credit Index Paramjit Mahli, 631-786-6450 pmahli@cambridgeconsumerindex.com

SOURCE: Cambridge Consumer Credit Index

12/08/2003 12:05 EASTERN