Some consumers are avoiding holiday debt, or compensating for not having credit available, by using old-fashioned layaway plans.
These plans, brought back into vogue in recent years by retailers such as Kmart and Sears, allow consumers to set aside items at the store while they are paid off in installments over a number of weeks. Consumers take home the merchandise after they pay in full. Retailers usually charge fees, often $5 or $10, for using layaway.
Avoid using layaway on low-priced items, or your overall cost might be higher than if you used a high-interest credit card. Paying a $10 layaway fee on a $50 sweater is about the same as charging it on a 20 percent credit card for a year. And if you decide you don’t want the item, you end up paying an additional $5 or $10 cancellation fee. Gregory Karp, Chicago Tribune; Associated Press file photo
