The economy is trying to get better, but we all can still feel the pinch in our pockets. Just in time for the holiday season, Wal-Mart, Sears, Kmart, Marshall’s, Best Buy, Toys ‘R’ Us, ELayaway, and TJ Maxx are offering an old option – layaway.
Layaway is not a credit builder — although it doesn’t hurt or help your credit score. If it will save you the headache of getting denied at the register, try using layaway, rather than opening up a new credit card to pay for your items.
Wal-Mart is the newest company to hop on the bandwagon — allowing consumers to put electronics and toys on layaway. Layaway has been missing from the retail world vocabulary for five years.
According to Roman Shteyn, CEO of Credit-Land.com, layaway during the holiday season is a perfect solution to our current economic crisis. “Consumers are low on money, and Wal-Mart can see that as more than half of its consumers are paying cash acquired from living paycheck to paycheck, rather than putting expenses on their credit card,” he said.
“Layaway is a good for Wal-Mart too because layaway will draw consumers in and facilitate the purchasing process.”
In the 80s and 90s, layaway was at its peak, but the landscape changed when credit cards came on the scene. After credit cards came on the market, consumers forwent the layaway route and just put their costly expenses on their credit card.
With layaway consumers usually put anywhere from 10 to 20 percent of the items cost down initially. Then the consumer must sign up for a payment schedule which usually lasts anywhere from 30 to 90 days. There is also a one-time free that ranges from $5 to $10, which is the charge required for moving the item out of the store. If for any reason you have to cancel payment, you are subject to a $10 fee.
There isn’t a huge downside if you skimp out on payment, you just lose the item. But it’s a better price to pay than overdraft fees and extra charges that your bank may charge if you use debit or credit.
Layaway is a great option for a consumer who is running very close to their credit limit, is strapped for cash, or presently can’t afford an item. If you fall into either of those categories don’t be ashamed to finance an item through layaway.
