A lot of people count on their annual tax refund.
“For many families, this is the largest windfall they get all year, so it’s really important to use it wisely,” said Ted Rossman, senior industry analyst at Bankrate.com.
The average refund so far this year is $2,306, according to the IRS.
Bankrate asked nearly 2,500 what they planned to do with their refunds. More than half said they would save most or all that money, or pay down debt.
“Credit card debt is one to prioritize because the interest rates are so high,” Rossman explained. “Every dollar you pay down is basically a 15, 20, or 25 percent return, whatever your interest rate is. So, I think paying down debt and saving are great uses.”
Many people might benefit from doing some of both.
“It doesn’t have to be one or the other,” Rossman said. “It could be some of the money goes to credit card debt, some of it goes to saving, and maybe you even carve out a little bit of fun money while you’re at it.”
More Info: Poll: 67% expecting tax refunds say the money is important for their finances
Herb Weisbaum, The ConsumerMan, is the consumer reporter at Northwest Newsradio, the founder of ConsumerMan.com, and host of the Consumerpedia podcast. You can follow him on Facebook and Twitter.
