For some Texas residents, tax season is a stressful time. For others, however, the tax return they receive is a much appreciated boost to their finances. For many people in Texas and throughout the United States, using part or all of a tax return to pay down credit card debt is a popular choice.
According to a recent survey of 1,000 Americans carrying a credit card balance, 70.4 percent those receiving a tax refund plan to use it to pay down credit card debt. An additional 8.91 percent say they are unsure, but may use their refund for debt repayment purposes. Of the respondents who expected a tax refund, the average refund was $3,119.43 and they expected to use an average of 64.98 percent of the refund to pay down credit card debt.
Many Texas residents may be tempted to spend their tax refund on something fun, like clothes, dinners out or a trip. However, by using this sum to pay down consumer debt, people can save a lot of money in the long run by avoiding high interest rates. They survey found that many agreed, with 35.71 percent of respondents choosing to use all of their tax refund to pay down their credit cards.
Credit card debt can be debilitating for many Texas residents. Combined with other debt loads like student loans, mortgages or medical debt, it can sometimes be too much to reasonably pay down in a timely fashion. Those who are facing this issue and would like information about their legal options such as bankruptcy should contact a lawyer familiar with state bankruptcy law.
Source: cpapracticeadvisor.com, "Tax Refund? Many Americans Plan to Pay Debts", Mike Brown, April 12, 2018