Layaway vs. Credit Cards

Remember the days of layaway? I remember being a kid and watching my parents put some things on layaway around the holidays. I had no clue why, but I knew that we would come back and get the stuff later.

My parents would make the payments and without fail, the toys would be freed from layaway jail. I’m not exactly sure what it cost twenty years ago to use layaway, but I think it’s relatively the same as today. Most stores that still use layaway (Kmart, some Sears and Burlingtons, as well as jewelry stores and Walmart has just reintroduced its layaway option) will require a down payment of a certain percentage, weekly or biweekly payments, and also a flat fee (usually $5). The store will hold your items and you can pick them up once you’ve completed payment on it. Sounds reasonable, right?

But with the creation of store credit cards, there really isn’t a need for layaway. The ‘pay over time, pick up your gifts later’ mindset has turned into ‘pay later, take your gifts home now with this store credit card’.

While I don’t support the idea of paying more for something (layaway charging $5 or more for the convenience of paying over time), I really don’t like the idea of charging credit cards for gifts that you get now. Unfortunately, I think instant gratification won in the battle between layaway and credit cards.

I’ll use a credit card to buy gifts this year, but will pay it with the savings we set aside for this holiday.

What about you? Do you plan on using layaway, credit cards, debit or cash this holiday?

What Are Your Thoughts?leave a comment
  • Tom

    I don’t plan to use layaway or credit cards for this Christmas. I plan to pay either cash or use my debit card. Since last December my wife and I have been debt free other than our mortgage and car payment. We make charges on our credit card but it pay it off each month. It just takes planning, and discipline. Do I need it now or can I wait till next month to buy something?

  • Sunny

    You forgot to add that for $5 they can store the items for you if you don’t have enough space at home. Especially for big ticket items – bikes, TV’s, etc. It’s also a lot nicer to be “debt free” after the holidays instead of having to pay down all the christmas expenses in the new year. I do agree with the previous review that buying just what you can afford would be ideal. But for those that can’t resist a christmas gift “splurge”, layaway is a pretty good option.

  • same day loans

    Layway has its own value when our parents used to purchase any expensive item but now we have credit card which allow us to pay first and pay later just opposite of layway.

  • payday lenders

    I am not thinking to use Layaway or credit card but I think it is a good deal.It must be used once.Thanks for the post.