As you browse the aisles of your local clothing store or toy store, you are probably adding up the totals as you go. Don’t forget to check with that store to see if they have a layaway plan. Unlike department store cards, there is no credit bureau check. In your layaway, you will usually need to have an initial down payment, but then you will also be able to make manageable payments over time. Once the item is paid for in full, it’s yours! Here are some of the Pros and Cons of your layaway plan:
Pros
- Convenience and flexibility, allows customers to make small payments over time
- Supports responsible budgeting
- Layaway is an agreement between you and the store so if the deal falls through, there is no negative effect on your credit score
- Layaway fees are typically cheaper than interest paid on credit cards
- Beat the holiday rush, shop before the stores get too crowded and get that must have item before it’s sold out!
Cons
- You could lose whatever investment you made if the retailer were to go out of business.
- Layaway fees range from $5 to $100
- Missing a payment could mean that lose all the payments that you have already made.
