Considering a Layaway Purchase? Read This “With so many Americans still struggling financially and reeling under credit-card debt, layaway is likely to be an even more attractive alternative to pay for gifts this holiday season. If you’re unfamiliar with the layaway process, here’s how it works.” [Consumer Reports Money]


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  1. Kamidari says:

    I don’t get the appeal of this at all… Why not just wait 30-90 days and buy the thing, minus the fees. At least buying on credit, you get the item now.

  2. kewlfocus says:

    Seriously, just learn to save. Oh wait, forgot, this is America. We LOVE paying fees for NOTHING.

  3. bohemian says:

    Back in the dark days of history when I was a poor student layaway was free. With all the service fees it isn’t quite the great deal it used to be.

    It used to be a useful tool if you really wanted to grab something before they were all gone but didn’t have all the money up front.

  4. unpolloloco says:

    Say you put a $100 item on layaway for 90 days and pay a $10 service charge, or 10% of the cost. This is the equivalent of paying 40% interest on the item. Instead, you use a credit card at 20% interst to pay for the $100 item and pay it off in 90 days. Total interest charges = $5. The break even point is $200. It’s more if your interest rate is less.

    Moral: unless it’s something that’s really expensive or you can’t trust yourself to pay off the balance on your credit card, it’s a better deal to pay with plastic.

  5. tonalanswer says:

    @Oranges w/ Cheese wants it to be winter already:

    From the article: If you’re unfamiliar with the layaway process, here’s how it works: You enter into a contract and make an initial deposit based on a percentage of the purchase price, along with a service fee to administer the plan and keep the item in storage.

  6. Kamidari says:

    @pecan 3.14159265: I guess I can see people using it for that. I’m crazy enough to not buy stuff if I don’t have the money, though. ;) I guess if it’s really only a $5-$10 fee, it wouldn’t be crazy to use it for a large item, anyway… Cheaper than charging it if you’re going to pay interest.

  7. morganlh85 says:

    @catastrophegirl: I would imagine they’d have a problem with people putting computers on layaway, getting it out 3 months later, returning it and getting a newer, cheaper model, leaving them with the out-of-date stock. Technology changes too fast I guess.

  8. AustinTXProgrammer says:

    @catastrophegirl: The down payment and penalties for not completing a transaction would have to be massive, they depreciate too quickly. It would be a bad idea for the buyer anyways.

    If you need to take 3 months to get enough money, save it in the mattress and you will get a better computer.

  9. Spotz says:

    @catastrophegirl: Who goes to K-mart to buy a computer????

  10. mbz32190 says:

    @morganlh85: @catastrophegirl: I haven’t seen a Kmart selling any kind of computers in years so I doubt that is an issue.

  11. speedwell (propagandist and secular snarkist) says:

    @Kamidari: I’m like you, I tend not to buy things when I don’t have cash in hand. Therefore I really can do without credit cards and there are few occasions where they would make things easier for me. Layaway, however, is a godsend.

    I wear a hard-to-fit style and size, for example, and it’s one that tends to sell out quickly. If I can shop while things are available (which is far into the season before they’ll be needed), and lay them by while I make payments on them, I am assured of having clothes that fit when the time comes to wear them.

    Layaway also helps me control my spending. If I had a credit card, I might be more susceptible to the “I have to have it right now” demon. Layaway gives me an incentive to ask myself whether I really need something and whether it’s worth waiting for.