Layaway is Making a Comeback
I read an interesting article in the Detroit News about layaway. Before there were credit cards, stores offered layaway as an option to consumers who may not have had the money right away to purchase something. The customer would put money down on the item and submit payments, including a fee for the layaway option. Once the item was paid off, it is released to the customer.
Now banks are lowering credit card limits and home equity lines, and even consumers who have credit are reluctant to add to their balances during the economic downturn. That has layaway returning as an increasingly popular alternative.
Via [Detroit News]
I’m on the fence with layaway. Is it better than credit cards or are you still spending money you don’t have? I mean, less the layaway fee (according to the article it is typically $5), I can see layaway as sort of a forced savings account for an item. Then again, you are entering a committment to purchase an item and you may be hit with cancellation fees if you cannot make all of the payments.
What do you think?
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