How to Avoid Holiday Credit Card Debt
Layaway Makes Holiday Gift Giving Budgets Easier to Manage
Nov 17, 2008
Worry about tightening credit and threatened job cuts are causing family members to reexamine their holiday shopping budgets. With dismal retail outlooks already making headlines, early sales don’t seem enough incentive to get anxious buyers to part with their cash.
Creative consumers are now realizing that the retro practice selecting purchases, and making installment to pay in full before receiving the item makes gift budgets easier to manage.
The practice of layaway has been generally discontinued in recent years because the costs incurred by the retailer managing the service did not support the declining use of the option by their customers.
With the economic downturn causing buyers to rethink the use of credit cards as the payment method of choice, the idea of putting purchases on hold and making interest free installment payments is driving layaway to a comeback in a big way.
Layaway is also showing up on the internet, with websites offering merchants and consumers opportunities to make customized installments on purchases, paying in full before the item is shipped. Even vacations can be purchased online by the method. Once the agreement is made, payments are automatically withdrawn from the purchaser’s bank account.
Drawbacks and Benefits of Layaway
As with any consumer agreement, it's important to know the rules before you participate. Individual stores make the rules on their layaway policies. As these rules vary, it is important that the shopper manages layaway purchases carefully.
The service is not free. Retailers charge service and cancellation fees and require a deposit for a layaway.
If an agreed upon installment is not made, the retailer will put the merchandise back on the shelf. Avoid disaster by being aware of the policy so last minute gift retrieval doesn’t bring the surprise that the purchase is no longer available.
Many savvy consumers are finding the benefits of layaway well worth the effort.
- Gifts on layaway are safe from prying eyes
- Instead of waiting until payday to make that special purchase, the item can be put on layaway when it goes on sale
- Installment paying makes the gift giving budget easier to manage
- There are no credit checks to use the layaway option
- If the items go on sale at the same store, the transaction documents are more readily available to take advantage of those cost savings
- The fees associated with layaway are less than interest charged on credit cards
Layaway gives the best gift of all to the giver. Imagine facing the New Year knowing that there is no credit card debt looming after the holiday.
