“Instead of treating tax refunds as disposable income, those with lower credit scores would be better off using their extra money to pay off credit card debt."
Salt Lake City, UT (PRWEB) April 02, 2015
One in three Americans who expect a tax refund plan to squander their tax refunds this year, suggests a study sponsored by Lexington Law Firm, the nation’s leading credit repair service provider.
Harris Poll, on behalf of Lexington Law, surveyed more than 4,000 adults ages 18 and older in February 2015. The survey asked specific questions related to how their tax refunds are being used, their credit score and general knowledge of credit, and how they’ve used their tax refunds in the past.
Results showed that one in three Americans plan to spend their tax refund on non-essential items, such as vacations, entertainment, electronic and mobile devices.
Other key findings included:
- 18 percent of U.S. adults admit they have later regretted what they purchased with their tax refund
- 26 percent of those with a poor credit score admit they are not at all/not very financially responsible
- 33 percent of men reported they consider a tax refund as a bonus check to be used to buy themselves something rather than pay off a debt, compared to 27 percent of women who say this
- Those with good or fair credit scores who expect a tax refund this year are more likely than those with excellent or poor credit scores to spend it on something non-essential
“It’s important to choose wisely when utilizing your tax refunds,” said Randy Padawer, a consumer advocate for Lexington Law.
According to the study, Americans who say they have poor credit scores are more likely than those claiming excellent credit scores to agree that tax refunds are to be used for fun purchases (47% vs. 33%), would rather buy something for themselves or a loved one from a tax refund rather than pay off a debt (51% vs. 20%), and to consider a tax refund as a bonus check that should be used to buy themselves something rather pay off a debt (39% vs. 22%).
“Credit scores were designed to help lenders predict who is most likely to repay borrowed money, and this study would certainly confirm that consumer behavior,” Padawer said.
“Instead of treating tax refunds as disposable income, those with lower credit scores would be better off using their extra money to pay off credit card debt. Not only is that the healthiest financial move, but lowering card balances is the quickest way to actually raise your credit scores.” Padawer added.
To view the full study, visit Lexington Law’s newsroom.
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This survey was conducted online within the United States from February 3-5 and 6 -10, 2015 among 4,031 adults ages 18 and older by Harris Poll on behalf of Lexington Law via its Quick Query omnibus product. Figures for age, sex, race/ethnicity, education, region and household income were weighted where necessary to bring them into line with their actual proportions in the population. Propensity score weighting was used to adjust for respondents’ propensity to be online.
All sample surveys and polls, whether or not they use probability sampling, are subject to multiple sources of error which are most often not possible to quantify or estimate, including sampling error, coverage error, error associated with nonresponse, error associated with question wording and response options, and post-survey weighting and adjustments. Therefore, Harris Poll avoids the words “margin of error” as they are misleading. All that can be calculated are different possible sampling errors with different probabilities for pure, unweighted, random samples with 100% response rates. These are only theoretical because no published polls come close to this ideal.
Respondents for this survey were selected from among those who have agreed to participate in Harris Poll surveys. The data have been weighted to reflect the composition of the adult population. Because the sample is based on those who agreed to participate in the Harris Poll panel, no estimates of theoretical sampling error can be calculated.
About Lexington Law
Lexington Law is a consumer advocacy law firm with decades of experience, helping hundreds of thousands of Americans work to improve their credit. The firm comprises the largest network of credit repair professionals in the U.S., employing attorneys and paralegals/agents across 19 states. By leveraging consumer rights to resolve issues with creditors, data furnishers and credit bureaus, Lexington works to ensure that client credit reports are fair, accurate, and substantiated. For details about Lexington Law’s services or attorneys, please visit http://www.lexingtonlaw.com.
About The Harris Poll
Over the last 5 decades, Harris Polls have become media staples. With comprehensive experience and precise technique in public opinion polling, along with a proven track record of uncovering consumers’ motivations and behaviors, The Harris Poll has gained strong brand recognition around the world. The Harris Poll offers a diverse portfolio of proprietary client solutions to transform relevant insights into actionable foresight for a wide range of industries including health care, technology, public affairs, energy, telecommunications, financial services, insurance, media, retail, restaurant, and consumer packaged goods. Contact us for more information.