Why is Layaway Becoming More Popular?

Why is Layaway Becoming More Popular?

Apparently CNBC is finding that more and more people are using layaway, and I just don’t get it! I have no recollection of using layaway, but then again I am only 27, and part of the generation where everyone had a credit card!  The Simpsons even had an episode where Santa’s Little Helper received a Credit a Card under the name, Santos E. Yelper.  Well, we all know how that is sorting itself out now.

Sears Layaway Details

Since I have never used layaway lets review the details from Sears layaway:

  • Contract is 8 Weeks
  • Biweekly payments necessary
  • Not available on every item
  • Nonrefundable Service charge of $5
  • Down payment is $15 or 20%, whichever is greater
  • Customers can receive only one price adjustment on advertised items within fourteen days of the initial layaway date

Granted, Sears provides pretty reasonable “fine print”, but that doesn’t make layaway is a good idea!

Using a High Yield Online Savings Account is a Better Option than Layaway

I am all about ING, one of the reasons is that it allows for multiple accounts.  The Wife and I have multiple accounts.  Here is a screen shot of my ING Accounts.

Ing Savings Accounts

Lets take Vacation Fund as an example.  Every week the wife and I put in 20 bucks a piece, nothing too crazy (less than a couple of beers on Long Island), but it is our ‘layaway’ for a vacation whenever we decide to take one.  My rules and fees? ZERO.  My wife’s ING screen is crazy! She has a car account, a baby account, a dog account, and each month she automatically puts some amount I don’t know off hand, right into each “layaway” account.  We do it without any fees, and are even earning interest (albeit a low interest rate).

ING Pays You to Set up a Layaway Account

For new accounts ING GIVES you $25 for deposits of $250 or more! Free $25 just for signing up.

$15 or 20%? HA TAKE THAT SEARS.  Then you can set up your bi-weekly payment just like you would do to Sears.

Want that $25 from ING? Just Contact My Journey to Millions and I will get you a referral link.

NEVER Do Layaway on Consumer Electronics

Lets say you ignore my advice, and decide to enter into a layaway contract, please do not do it with consumer electronics!  Who hasn’t seen a TV you bought drop by $100s in 8 weeks?  or that new crazy laptop drop $500 in a 2 month period?  So, just promise me…NO LAYAWAY FOR CONSUMER ELECTRONICS

5 Responses to Why is Layaway Becoming More Popular?

  1. Totally agree. We should be earning interest instead of paying interest. Over course, whenever someone earns interest, though, it means SOMEONE is paying interest. Hmmm. :-)

  2. I grew up on layaway and I am 43. My mother used it to buy our school clothes and supplies on layaway. Back then credit cards were not the norm and this was a great option to get the kids stuff and be able to have a budget and right before school started she would get our stuff out and we had brand new clothes and supplies. It’s just the way it was back then.

    And as for now I still think it’s a great idea for families without much money or credit. Heck there are still lots of people who do not have checking or savings account so doing the ING account is not an option for them. Also, layaway requires no credit approval and is a simple process. You either pay your bill or they put your items back, simple! I however, do NOT think layaway should be for large items or items you don’t really need. I see layaway for necessities.

    So don’t knock what you don’t understand as not everyone was as fortunate as you to grow up on credit cards, internet, cell phones and such niceties.

    • I don’t think I was judging, I was just trying to understand why use it versus an ING account or similar online account with sub-accounts you can name

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