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.

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