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Should You Give Layaway a Try This Christmas?

The holiday season is here, and with the holidays comes the stress of buying gifts – and figuring out how exactly to pay for them. Credit is certainly one way to pay, but in a tough economy, racking up additional debt is inadvisable. For individuals who are looking for a method of financing that doesn’t involve credit, many retailers have brought back layaway programs as an alternative.

What is Layaway

Layaway is a great option for financing purchases without having to use or open a new line of credit. Under a layaway program, you essentially put your item on hold with a down payment, which is typically about ten percent of the purchase price. After you have made your down payment, you agree to make regular payments on a plan (usually a six to eight week contract) until your item is paid off. Once your item is paid for, you can pick it up at the store.

Layaway allows you to buy items you might otherwise not be able to afford all at once without using credit. This is an especially good alternative for people with poor credit , as no credit check is required for this type of financing. Layaway may also be appealing even to those with good credit and existing lines of credit. Using a layaway plan instead of credit means no additional charges on a card each month and therefore no hefty finance charges.

Layaway Requires Planning

There are, however, a few minor drawbacks involved when it comes to putting items on layaway. Unlike purchasing an item outright or on credit, when you use layaway you don’t get the instant gratification of taking your purchase with you. This may not seem like a problem if you plan on using layaway to purchase items as gifts for others and not yourself, however, the length of your layaway contract could cause some hassle during the holiday season, so planning is going to be required on your part. With layaway, last minute holiday shopping is not an option. Before you commit to a layaway contract, make sure you are going to be able to pay for your gifts in time to have them in hand for the big day. Otherwise, you could be paying for your items well into January after the holiday season has come and gone. And though you may not have to deal with finance charges, there may still be fees involved. Before you commit to layaway, make sure you understand your contract and all of its stipulations.

Contact Advantage CCS

Holidays and spending are synonymous with one another, but the spirit of giving does not have to wreak havoc on your wallet. So to better help prepare yourself – and your budget – for the holiday season, contact Advantage Credit Counseling Service. Our team offers a variety of financial education and budget management services that may be beneficial to you during the holiday season and long after the holidays are over. Contact us today so that you don't get stuck with a massive credit card bill in January.