Even though Christmas spending has come and gone, many people are the recipients of a nice big tax refund, courtesy of Uncle Sam, which they simply feed back into the economy.
But not this year, a new survey suggests. A poll commissioned by Reuters and carried out by America’s Research Group has found that people may be more likely to pay off their credit card debt with their refund than to use it to go shopping.
The study discovered that 44 percent of respondents are planning to spend less after the holiday season – a figure that is usually closer to the mid-20s, according to Britt Beemer of America’s Research.
“What it tells you is that four out of nine families are going to cut back further after Christmas, which means you are going to see no impact next year from income tax refunds,” he told Reuters.
Part of the problem is that people seem to be enjoying shopping less this year, what with all of the dire economic indicators unveiled on a near-daily basis. Nearly 58 percent of respondents said looking for gifts is less pleasurable because of the economy.
This may be terrible news if you are a retailer. But if people are indeed planning to use their refund money to pay off credit card debt or another loan, it could be a very smart decision.
Recent figures have predicted that job losses could rise even higher in the coming months, which makes it more important than ever to make sure you have several months’ worth of money set aside in an emergency fund – as well as keeping your credit in healthy shape in case you need to rely on it.
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