Answer Man: Know what you’re getting into with layaways
Editor’s note: This Classic Answer Man column first ran Dec. 16, 2014.
Dear Answer Man, what’s the downside to buying something on “layaway?” I assume there are pros and cons to layaway plans.
There are pros and cons to everything. There may even be pros and cons to reading this column, though I haven’t come up with any of the latter.
There are definitely pros and cons to layaway plans, and it all depends on the store and how badly you need the item. Generally, there’s a service fee, which might be a flat $5 to $10. Depending on the purchase, that may be ridiculous. At least one big retailer has a service fee of 5 percent of the total purchase, which is better than most credit cards on an annual basis but still steep.
You’ll also need to make a downpayment, and often, there are cancellation and restocking fees if you have to back out.
If you don’t have a credit card or have other credit issues, though, layaway might be the best option. Just make sure you do the math and have a plan.