Most Tax Refunds Will Go Towards Debt, Savings

NEW YORK, March 12, 2015 /PRNewswire/ -- The most popular way Americans will use their tax refunds is to pay down debt, according to a new Bankrate.com RATE report. 34% of Americans who expect a refund gave that answer, followed closely by 33% who plan to save or invest their windfall. 26% will spend it on necessities such as food or utilities and just 3% will splurge on a vacation or shopping spree (down from 7% in 2010).

Two-thirds of millennials expect to receive a tax refund this year, more than any other age group. The likelihood of receiving a tax refund decreases with age: just 35% of people age 50 and older anticipate getting money back from the government.

Although experts generally frown upon receiving a tax refund because it amounts to an interest-free loan to the government, 38% of Americans prefer to receive a big refund and another 19% prefer a small refund.

"It's surprising that so many people still prefer to get a big refund, rather than adjust their withholding to get their money throughout the year," said Bankrate.com tax analyst Kay Bell. "You'd think during lean times, they'd need the money more to meet their monthly expenses. But old and bad tax habits die hard," she continued.

• Additionally, 43% of millennials are willing to pay higher taxes in exchange for free college tuition for all students, versus just 20% of other adults.
• Senior citizens are significantly more likely than other age groups to support higher taxes for repairing and rebuilding roads, bridges and mass transit.
• 22% of all Americans would welcome higher taxes if they would lead to free health care for anyone who needs it.

The survey was conducted by Princeton Survey Research Associates International (PSRAI) and can be seen in its entirety here:

http://www.bankrate.com/finance/consumer-index/money-pulse-0315.aspx

PSRAI obtained telephone interviews with a nationally representative sample of 1,003 adults living in the continental United States. Interviews were conducted by landline (502) and cell phone (501, including 276 without a landline phone) in English and Spanish by Princeton Data Source from February 26 to March 1, 2015. Statistical results are weighted to correct known demographic discrepancies. The margin of sampling error for the complete set of weighted data is plus or minus 3.7 percentage points.

About Bankrate, Inc.

Bankrate is a leading publisher, aggregator, and distributor of personal finance content on the Internet. Bankrate provides consumers with proprietary, fully researched, comprehensive, independent and objective personal finance editorial content across multiple vertical categories including mortgages, deposits, insurance, credit cards, and other categories, such as retirement, automobile loans, and taxes. The Bankrate network includes Bankrate.com, CreditCards.com, InsuranceQuotes.com and Caring.com, our flagship websites, and other owned and operated personal finance websites, including Interest.com, Bankaholic.com, Mortgage-calc.com, CreditCardGuide.com, CarInsuranceQuotes.com, Insweb.com, CreditCards.ca, and NetQuote.com. Bankrate aggregates rate information from over 4,800 institutions on more than 300 financial products. With coverage of over 600 local markets, Bankrate generates rate tables in all 50 U.S. states. Bankrate develops and provides web services to over 100 co-branded websites with online partners, including some of the most trusted and frequently visited personal finance sites on the Internet such as Yahoo!, AOL, CNBC, and Bloomberg. In addition, Bankrate licenses editorial content to over 500 newspapers on a daily basis including The Wall Street Journal, USA Today, The New York Times, The Los Angeles Times, and The Boston Globe.

For More Information:

Adriana Perisa
Publicist
adriana.perisa@bankrate.com 
917-368-8637

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SOURCE Bankrate, Inc.