Full Article Link: CBS News – 3 smart ways to use your tax refund this year, according to experts
Quote from Noah Lewis
“If you have a credit card at 18%, we want to do whatever we can to take that out as fast as possible.”
— Noah Lewis, Financial Advising Analyst at Scholar Advising
Key Takeaways
Tax refunds are larger in 2026 — and that creates opportunity.
With refunds projected to be $300 to $1,000 higher on average this year, many households have a rare chance to make meaningful financial progress. The key is treating the refund as a strategic tool — not bonus spending money.
High-interest debt should be the priority.
Credit card rates are hovering near 21%. That makes paying down balances one of the highest guaranteed returns available. As Noah Lewis points out, eliminating 18% debt is financially equivalent to earning 18% risk-free — something you simply cannot replicate in today’s markets.
Short-term parking can still earn meaningful interest.
For those without high-rate debt, high-yield savings accounts and CDs remain viable options for short-term funds. While rates have moderated, competitive accounts are still offering yields near 4%, making them a solid choice for money needed within the next one to three years.
Mortgage prepayments can offer a risk-free return.
For homeowners with rates in the 6% range, applying a refund toward principal can meaningfully reduce lifetime interest and shorten the loan term. That said, liquidity matters — emergency savings should always come first.