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?