Holiday Savings & Prep: Layaways

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Here at Money4You, we’re everything about making your financial life much easier. And with the holidays turning up, that indicates speaking about ways to manage all those goodies without breaking the bank. So today, we’re going to speak about layaway plans.

Pros of Layaway Plans

1. Interest-Free Purchasing
While layaway does come with charges, you will not be charged interest on your purchases. That can save you a lot of green. For instance, suppose that you charge a $900 TELEVISION to a charge card with 18% interest. If you take 2 months to pay the balance off, you’ll have paid one month’s interest, or $162. This makes the $5 service charge more attractive.

2. Accessibility of High-Demand Items
Layaway comes in handy throughout the busy holiday season when popular electronics and toys can sell out quickly. Putting a popular product on layaway now ensures you will have it for the holidays.

3. Offered Online
Some sellers offer layaway for online purchases. That saves you the annoyance of surviving holiday season shoppers, waiting in long lines, or going to a number of shops looking for a popular item.

4. Easy Acceptance Criteria
Unlike a charge card, layaway programs do not carry out income or credit checks before approval. To get approved for layaway you simply require identification revealing that you are at least 18 years of age and enough money for the down payment. Therefore, even individuals with previous credit issues can qualify for a layaway program.

Cons of Layaway Plans

1. Delayed Gratification
Unlike many purchases, layaway strategies need that you make payments for weeks, or sometimes, even months, prior to you get access to the merchandise.

2. Fees
Merchants usually charge a fee to put a product on layaway, which is usually pretty low. It may nevertheless be more than you would pay in credit card interest if you just charge the product instead, particularly for lower expense products. Also, if you change your mind later on and have to drop the layaway plan, merchants will charge a cancellation or restocking charge.

3. Fixed Prices
With layaways, in order to get your product paid off on time, you may have to start shopping in October, well in advance of a few of the finest sales and discount rates of the holiday shopping season.

4. Losing Your Investment
In today’s hard economic environment, it’s not unheard of for a retail chain to go bankrupt with little expectation (consider CompUSA or Circuit City). If you have a layaway plan established at a business that winds up closing its doors, it will be challenging to recover your merchandise or your money.

Can’t get a layaway? You still have options! An installment loan can help you get back on track.

October 12, 2016 |

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