Twenty-Four Percent of Americans Plan to Spend or Invest Refund Checks from President Bush's Tax Cut Package, According to the Cambridge Consumer Credit Index.
(EMAILWIRE.COM, February 07, 2003 ) Twenty-four percent of Americans would either spend (18%) or invest (6%) any refund checks they receive from President Bush's proposed income tax cuts, according to the Cambridge Consumer Credit Index. Of those surveyed, 28% plan would put the refund in a bank savings account, 23% would pay off other bills, 19% would pay off credit card debt and 6% would use it for other purposes.
These findings are the result of monthly nationwide telephone poll of 1000 adults conducted by ICR/International Communications Research in the past week, sponsored by The Debt Relief Clearinghouse.
"The results of Cambridge Consumer Credit Index's wildcard question show that consumers are in such a cautious mood that most people would save any tax refund or use it to pay off debt or existing bills, rather than use it for new spending or investing." says Jordan Goodman, spokesperson for the Index. These results are similar to findings from the October 2002 wildcard question, which found that of the consumers who had refinanced their mortgages, 31% used the money to increase their savings, 23% paid off non-credit card debts, 15% paid off credit card debts, 11% used it for other purposes and only 20% used the savings to remodel their homes or spend the money in other ways.
The overall Cambridge Consumer Credit Index dropped by two points in February to 56. The "Reality Gap," which is the difference between the amount of debt consumers say they will pay off in the next month compared to the amount of debt they actually pay off a month later, doubled to 20 percentage points-- the widest the reality gap since the index was launched in December 2001. A month ago, 89% planned to pay off debt, while a month later only 69% actually did so.
The Cambridge Consumer Credit Index is a forward looking economic indicator gauging consumer spending and debt. It is released on the fifth business day of every month to coincide with the Federal Reserve Board's G19 release of consumer credit outstanding data.
In conjunction with the Index, the Cambridge Credit Counseling Corp., is releasing its monthly survey of people who have called in for credit counseling services over the past month. Cambridge representatives ask callers for the primary reason that they found it necessary to get help with their debts now. Of the 1495 people who answered, this was the order of their responses:
1. I am frustrated with high bank rates and fees (31.5%)
2. My income has been reduced from a lower salary, less overtime or layoff (24.5%)
3. I got into too much debt by overspending (13.5%)
4. I want to improve my ability to achieve future financial goals like buying a house or saving for retirement (11.8%)
5. My lack of financial education caused me to take on too much debt (7.4%)
6. Large medical expenses forced me to take on huge debts (4.6%)
7. Other reasons (3.9%)
8. My recent divorce or widowhood forced me to take on large debts (2.8%)
For more information on the survey see www.cambridgeconsumerindex.com/camsurvey.htm
"With the increasing number of consumers in debt, it is reassuring to see that of those polled, 70 percent consider using their refund check to invest in their financial security", said Chris Viale, general manager of Cambridge Credit. "Consumers may be mindful of the current economic climate and realize that it has an affect on their financial situation, yet it is equally important that they develop and practice the necessary money management skills to succeed regardless of the state of the economy".
The Cambridge Consumer Credit Index number is a composite of these three questions:
1. In the past month, have you taken on more debt or paid off debt?
The Index reads 62 on this question, a drop of 20 points from January.
In February, 31% of Americans say they have taken on more debt, with 22% taking on a little and 10% taking on a lot more debt. Conversely, 69% of Americans have paid off debt, with 50% paying off a little and 19% paying off a lot. In January, 41% of consumers had taken on more debt while 59% had paid off debt, indicating that the number of Americans taking on debt fell sharply this month.
2. In the next month, do you anticipate taking on more debt or paying off debt?
The Index reads 38 on this question, a jump by 16 points from January.
In February 19% plan to take on more debt, with 6% planning to take on a lot and 13% planning to take on a little debt. Conversely, 81% plan to pay off debt, with 58% paying off a little and 22% paying off a lot. In January, 11% planned to take on debt and 89% planned to pay off debt, indicating that intentions to take on debt are rising.
3. In the next six months, do you expect to take on debt because you are thinking of making a major purchase such as a car, education, appliance, medical procedure, furniture or carpeting?
The Index reads 68 on this question, a drop of two points from January.
In February, 34% of Americans plan to take on more debt to make such purchases, with 10% taking on a lot of debt and 24% taking on a little more debt. In contrast, 66% of Americans plan to pay off debt in the next six months, with 45% expecting to pay off a little and 21% expecting to pay off a lot. In January, 35% of Americans planned to take on more debt, while 65% planned to pay off debt. Intentions to make major purchases over the next six months were essentially unchanged.
"The Cambridge Consumer Credit Index drop of another two points this month, following an eight point drop in January, shows that consumers are remaining cautious about taking on more debt in light of economic and geopolitical uncertainty and the amount of debt they are already burdened with," says Jordan Goodman, spokesperson for the index.
The Index survey is conducted by ICR (International Communications Research) of Media, Pennsylvania over five days in the week before the Index is released. Over 1000 households are polled based on random-digit dialing, with all demographic and regional groups in America fairly represented. The Index has a margin of error of plus or minus three percentage points.
For more information about the Cambridge Consumer Credit Index, contact media relations representative Paramjit Mahli at pmahli@cambridgeconsumerindex.com or 800-804-0575, or economist Allen Grommet, who provides an economic analysis of Index results, at agrommet@cambridgeconsumerindex.com or 800-804-0575, or the Index website at www.cambridgeconsumerindex.com. Consumers wishing to find out more about Debt Relief Clearinghouse referral services should call 1-888-4DEBTHELP or visit www.debtreliefonline.com.
------------------------
Produced for the Cambridge Consumer Credit Index
Contact: Paramjit Mahli
800-804-0575
pmahli@cambridgeconsumerindex.com
------------------------
These findings are the result of monthly nationwide telephone poll of 1000 adults conducted by ICR/International Communications Research in the past week, sponsored by The Debt Relief Clearinghouse.
"The results of Cambridge Consumer Credit Index's wildcard question show that consumers are in such a cautious mood that most people would save any tax refund or use it to pay off debt or existing bills, rather than use it for new spending or investing." says Jordan Goodman, spokesperson for the Index. These results are similar to findings from the October 2002 wildcard question, which found that of the consumers who had refinanced their mortgages, 31% used the money to increase their savings, 23% paid off non-credit card debts, 15% paid off credit card debts, 11% used it for other purposes and only 20% used the savings to remodel their homes or spend the money in other ways.
The overall Cambridge Consumer Credit Index dropped by two points in February to 56. The "Reality Gap," which is the difference between the amount of debt consumers say they will pay off in the next month compared to the amount of debt they actually pay off a month later, doubled to 20 percentage points-- the widest the reality gap since the index was launched in December 2001. A month ago, 89% planned to pay off debt, while a month later only 69% actually did so.
The Cambridge Consumer Credit Index is a forward looking economic indicator gauging consumer spending and debt. It is released on the fifth business day of every month to coincide with the Federal Reserve Board's G19 release of consumer credit outstanding data.
In conjunction with the Index, the Cambridge Credit Counseling Corp., is releasing its monthly survey of people who have called in for credit counseling services over the past month. Cambridge representatives ask callers for the primary reason that they found it necessary to get help with their debts now. Of the 1495 people who answered, this was the order of their responses:
1. I am frustrated with high bank rates and fees (31.5%)
2. My income has been reduced from a lower salary, less overtime or layoff (24.5%)
3. I got into too much debt by overspending (13.5%)
4. I want to improve my ability to achieve future financial goals like buying a house or saving for retirement (11.8%)
5. My lack of financial education caused me to take on too much debt (7.4%)
6. Large medical expenses forced me to take on huge debts (4.6%)
7. Other reasons (3.9%)
8. My recent divorce or widowhood forced me to take on large debts (2.8%)
For more information on the survey see www.cambridgeconsumerindex.com/camsurvey.htm
"With the increasing number of consumers in debt, it is reassuring to see that of those polled, 70 percent consider using their refund check to invest in their financial security", said Chris Viale, general manager of Cambridge Credit. "Consumers may be mindful of the current economic climate and realize that it has an affect on their financial situation, yet it is equally important that they develop and practice the necessary money management skills to succeed regardless of the state of the economy".
The Cambridge Consumer Credit Index number is a composite of these three questions:
1. In the past month, have you taken on more debt or paid off debt?
The Index reads 62 on this question, a drop of 20 points from January.
In February, 31% of Americans say they have taken on more debt, with 22% taking on a little and 10% taking on a lot more debt. Conversely, 69% of Americans have paid off debt, with 50% paying off a little and 19% paying off a lot. In January, 41% of consumers had taken on more debt while 59% had paid off debt, indicating that the number of Americans taking on debt fell sharply this month.
2. In the next month, do you anticipate taking on more debt or paying off debt?
The Index reads 38 on this question, a jump by 16 points from January.
In February 19% plan to take on more debt, with 6% planning to take on a lot and 13% planning to take on a little debt. Conversely, 81% plan to pay off debt, with 58% paying off a little and 22% paying off a lot. In January, 11% planned to take on debt and 89% planned to pay off debt, indicating that intentions to take on debt are rising.
3. In the next six months, do you expect to take on debt because you are thinking of making a major purchase such as a car, education, appliance, medical procedure, furniture or carpeting?
The Index reads 68 on this question, a drop of two points from January.
In February, 34% of Americans plan to take on more debt to make such purchases, with 10% taking on a lot of debt and 24% taking on a little more debt. In contrast, 66% of Americans plan to pay off debt in the next six months, with 45% expecting to pay off a little and 21% expecting to pay off a lot. In January, 35% of Americans planned to take on more debt, while 65% planned to pay off debt. Intentions to make major purchases over the next six months were essentially unchanged.
"The Cambridge Consumer Credit Index drop of another two points this month, following an eight point drop in January, shows that consumers are remaining cautious about taking on more debt in light of economic and geopolitical uncertainty and the amount of debt they are already burdened with," says Jordan Goodman, spokesperson for the index.
The Index survey is conducted by ICR (International Communications Research) of Media, Pennsylvania over five days in the week before the Index is released. Over 1000 households are polled based on random-digit dialing, with all demographic and regional groups in America fairly represented. The Index has a margin of error of plus or minus three percentage points.
For more information about the Cambridge Consumer Credit Index, contact media relations representative Paramjit Mahli at pmahli@cambridgeconsumerindex.com or 800-804-0575, or economist Allen Grommet, who provides an economic analysis of Index results, at agrommet@cambridgeconsumerindex.com or 800-804-0575, or the Index website at www.cambridgeconsumerindex.com. Consumers wishing to find out more about Debt Relief Clearinghouse referral services should call 1-888-4DEBTHELP or visit www.debtreliefonline.com.
------------------------
Produced for the Cambridge Consumer Credit Index
Contact: Paramjit Mahli
800-804-0575
pmahli@cambridgeconsumerindex.com
------------------------
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Cambridge Consumer Credit Index, Inc.
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Cambridge Consumer Credit Index, Inc.
Joseph Nchor
Tel:
Email us
This is a press release. Press release distribution and press release services by EmailWire.Com: http://www.emailwire.com/us-press-release-distribution.php.
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