What are you going to do with your tax rebate?

— -- Rob Karas, 39, of Haymarket, Va., expects to receive a tax rebate of $2,400 this spring. It's a nice-sized amount, but don't look to the Karas family to stimulate the economy.

Karas, an information security expert, plans to invest $1,200 in retirement savings for himself and his wife. The remaining $1,200, he says, will go straight into college savings accounts for his four children, ages 1 through 11.

He had considered using the money to take his family to Disney World. But "With the uncertainty of the economy," Karas says, "right now, I'm going to forget I got that money and put it in mutual funds."

That's not exactly what the Bush administration wants to hear. Starting in early May, more than 130 million Americans — or at least, those who have filed a tax return by the deadline at midnight Tuesday night — will receive tax rebates ranging from $300 to $600, or $1,200 for married couples, plus $300 for each dependent child. The rebates, which represent a one-time cut in 2008 tax rates, were intended to help rescue the economy from recession by encouraging consumer spending. A similar rebate program in 2001 was widely credited with curtailing that year's recession.

But this time could be different. Home values have plummeted, gas prices are higher and millions of Americans are hip-deep in debt. Consumer confidence has sunk to its lowest in 26 years.

Though consumers don't always do what they say they will, some polls suggest that the rebates are unlikely to spend the economy out of trouble. According to a survey by CCH, which publishes tax reference guides and tax software, 47% of adults say they plan to use their rebates to pay down debt; 32% say they plan to save the money.

Just 21% intend to spend it.

In a separate survey by H&R Block, 45% of Americans said they plan to use the rebate to pay bills, 18% plan to invest the money and 21% expect to use it for necessities, such as groceries. Only 16% said they'd spend it on non-necessities, such as a vacation.

A survey conducted on behalf of the National Retail Federation was more optimistic. According to the NRF survey, consumers will spend nearly 41% of the estimated $105.7 billion in rebates, pumping about $43 billion into the economy. Americans will use about $30 billion, or 28%, to pay down debt and save about $20 billion, or 19%, the survey said.

There's no chance, says Theresa Davis-Brady, 40, of Ann Arbor, Mich., that her rebate will go toward Wal-Mart, Target or Best Buy's bottom line. Davis-Brady, a mother of two, recently lost her job after her employer closed the facility where she worked. She's found a new job as a clinical researcher but won't start until May. She says she'll use her rebate to replenish her savings, which she'll probably have to tap to pay expenses until she returns to work.

Among factors that could limit how much of their rebates consumers will end up spending:

•Rising debt.

The average consumer owed $16,640 in credit card debt, car loans and other non-mortgage debt in February, up 7.8% from a year earlier, according to Experian, a credit-reporting agency. The average payment for revolving and fixed-payment loans, not including mortgages, was $815 — up more than 9% from a year earlier.

Dennis Hunt, 55, of Belleville, Ill., says he'll use his rebate to reduce his credit card debt, which totals about $14,000. Hunt says he had already resolved to pay off all his credit cards before Congress approved the rebates. His rebate, he says, will allow him to achieve his goal a little sooner than he'd planned.

Once the balance is paid, Hunt says, "I'll be out of that business." He intends to use his credit card only for emergencies and vacations, and to pay the balance off every month.

Gary Cardella, 58, owner of the Elliott Insurance Group, an independent insurance agency in Plantsville, Conn., says he recently paid off the balance on his credit card. He still doesn't plan to spend his rebate. Instead, he'll put the money into savings accounts for his two sons, who are both in college. Cardella says the 22 employees in his office have all said they intend to use at least some of their rebates to pay off debt. "Everybody is just hunkering down," he says.

•Higher gas prices.

Barbara VanDoren, a contract specialist for the Department of Defense Commissary Agency in Fort Lee, Va., drives a minivan and lives about 30 minutes from work. Her vehicle isn't fuel-efficient, she says, but the cost was manageable when gas was $2 a gallon. Now, she's paying more than $3.20 a gallon and expects gas prices to go even higher. Her rebate, she says, will go into her gas tank.

"It's kind of sad, really," VanDoren says. "We're going to be putting the money into the wrong economy — oil companies that aren't even here."

In April 2001, the average price for a gallon of gas was $1.55, or about $1.86 in 2008 dollars, according to the Energy Information Administration. On Monday, EIA said the average price is $3.39, an 82% increase, even after accounting for inflation. And millions of Americans say they're feeling the pinch. According to a USA TODAY/Gallup Poll conducted March 14-16, 63% of Americans report that the surge in gas prices has caused them financial hardship, up from 47% when the survey was conducted in May 2001.

•Skyrocketing health care costs.

Prices of other essentials have also soared since the last tax rebate. Since 2001, the average cost of health insurance premiums has increased by 78%, according to the Kaiser Family Foundation. (Over the same period, by contrast, the consumer price index rose much less: 17%.) Co-payments and deductibles have risen, too.

David Ditmars, 59, marketing director for a software company in Columbus, Ohio, says his wife fell a few weeks ago and broke her knee and a tooth. More recently, Ditmars underwent cataract surgery. Though the couple have health insurance, Ditmars expects their out-of-pocket medical expenses to range from $3,000 to $4,000.

"That eats up the deductible and then some," he says.

Faced with the threat of such high medical bills, even consumers who are financially secure seem hesitant to spend their rebates. Danny Kofke, 32, a special-education teacher who lives outside Atlanta, plans to save the $1,800 he'll receive for himself, his wife and his two daughters, ages 3 and 10 months.

The family already has an emergency fund, "But you never know when something bad is going to happen," Kofke says. "Last month, we were all sick, and even with insurance, we spent $600 out-of-pocket."

Consumers, of course, don't always honor their financial resolutions. Initially in 2001, the average credit card holder used the rebate to pay down debt, according to a study by three economists from the Federal Reserve Bank, the University of Nevada-Reno and the University of Pennsylvania's Wharton School. Soon after, though, consumer spending rose. On average, consumers spent 40% more than the amount of their rebate within nine months after the rebates were distributed, the study concluded.

Shlomo Benartzi, a professor who specializes in behavioral finance at the University of California-Los Angeles, is skeptical about Americans' pledges to use the rebates to invest or shrink their debt. Americans don't do a very good job of saving money, he says, unless it's automatically whisked into a 401(k) or other type of account.

In 2001, the only people who saved all of their rebates were high-income individuals "who didn't need to save," Benartzi says. "This time, people will spend it as well."

Will spending help or hurt?

Brian Bethune, chief U.S. financial economist for Global Insight, projects that consumers will eventually spend half their rebates, but at a slower rate than in 2001. He expects consumers to spend 40% of their rebates by the end of this year and an additional 10% by the end of 2009. The rest will be saved or used to pay off debt, he predicts.

That outcome would be unfortunate, says Mark Johannessen, a financial planner in McLean, Va., and president of the Financial Planning Association.

"You have people who are losing their homes because they can't keep up with the rising price of oil or interest rates on their mortgages," he says.

Though an increase in consumer spending could provide a short-term benefit to the economy, Johannessen says, it won't offset the long-term damage of the subprime mortgage collapse.

Chris Moloney, chief marketing officer for Scottrade, an online brokerage firm, says his firm's research suggests that in the current economic climate, "People are really focused on paying down debt and saving for retirement." And that's not necessarily bad for the economy, he contends.

If a large number of Americans reduce their debt or save more for retirement, "You would expect that to have an impact on consumer confidence," Moloney says. "And that could have a bigger impact than going to the mall."