BACK

Research and Statistics

Tax refunds: Urges to save it, spend it clash

Summary

Study shows that most who spend it on needed items or paying down debt feel better rather than those who saved it

The content on this page is accurate as of the posting date; however, some of our partner offers may have expired. Please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs.

Americans may sit on the fence between saving and spending when they initially ponder their upcoming tax refund. But in the end, more will spend it on buying things they need — and will feel relatively good about their choice, according to Capital One’s “2016 Bonus and Tax Refund Survey.”

When asked whether their first thought about a tax refund would be to spend it on debt balances or needed purchases vs. saving it for a rainy day or retirement, the responses were virtually identical at 40 percent and 41 percent, respectively.

But ultimately, a strong majority (61 percent) reported that they would rather spend their tax refund now on something they need than save it for something they want later (39 percent).

More than half (56 percent) view their refund as money that’s owed back to them by Uncle Sam, with another 17 percent considering the money as extra funds available for necessities. Only 1 in 8 think of their tax refund as “fun money” they can play with.

But spending on needs was reportedly gratifying for most, with 51 percent of respondents saying they feel good about using their tax refund for things they need. Less than a quarter (23 percent) lamented not being able to spend it on things they want.

Conducted by Taylor from March 2-5, 2016, Capital One’s survey sampled 1,000 adults ages 18-54 who self-identified as being eligible for a refund in 2015. The findings were then weighted to correspond with known demographic proportions of the U.S., and were released March 24.

See related:Threat of tax fraud, tax ID theft grows, More infographics

To use the graphic on your site, use the following code:

 <center><a href=”https://www.creditcards.com/credit-card-news/infographic-tax-refunds-save-spend/”><img alt=”CreditCards.com Infographic: Tax refunds – Should I save or should I spend?” border=”0″ src=”https://www.creditcards.com/credit-card-news/images/tax-refunds-should-I-save-or-spend.png” /></a> </center>

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

What’s up next?

In Research and Statistics

Threat of tax fraud, tax ID theft grows

The year 2016 has already seen a surge in email tax fraud, the IRS warns, and private tax collectors may add to the confusion

See more stories
Credit Card Rate Report Updated: September 16th, 2020
Business
13.91%
Airline
15.48%
Cash Back
15.94%
Reward
15.78%
Student
16.12%

Questions or comments?

Contact us

Editorial corrections policies

Learn more

Join the Discussion

We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, do not disclose confidential or personal information such as bank account numbers or social security numbers. Anything you post may be disclosed, published, transmitted or reused.

The editorial content on CreditCards.com is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company’s business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.