If you’re short on cash or credit, buying an item on layaway might strike you as an appealing idea, especially if you’re sure you’ll have the money for it in the near future. But what exactly is layaway, and is it a good idea? Let Money Ladder help you sort out fact from fiction.

What’s Layaway?

Layaway is the practice of paying for a good in portions, and then receiving the item once all of your payments have been completed. It’s different from an installment plan in that when you pay by installments, you get the item immediately and then pay it off piecemeal, whereas with layaway the payments must happen before the good is yours. When determining if layaways is a good idea for you, it’s crucial to keep in mind that it’s not the same thing as an installment plan, as this is a mistake many people make.

Advantages of Layaway

Getting an item on layaway purchases doesn’t accrue interest, which means that unlike many situations involving credit you won’t end up paying more in the long run than you would have with cash up front. Layaway also ensures that you’re not spending beyond your means. There’s no incentive to overspend if you can’t even get your hands on what you want until you’re done paying. Layaway is a good idea if you’re not trying to affect your credit score and you know you’ll have the money for what you want in good order soon.

Disadvantages of Layaway

Of course, if the money for what you want isn’t forthcoming, you’ve just saddled yourself with a reservation for something you might not be able to afford. It’s also worth noting that while layaways don’t accrue interest, they do frequently come with fees: there’s usually a small charge for opening a layaway account, and you can bet your bottom dollar (literally) that there’ll be a cancellation fee if you decide to back out. Figuring out if layaway is a good idea for you hinges on your certainty that you’ll be able to pay for what you want down the road, just as much as how certain you are that you want this particular item enough for the seller to guarantee it for you in the first place.

 Is Layaway Right for Me?

Layaway can be a good resource if you want (or need) to buy something expensive, but either don’t have the credit for it or don’t want to change the credit score you already have. That said, because it entails a certain level of financial obligation, layaway is a good idea only if you’re absolutely certain you’re going to have the income you need to make a final purchase. If you don’t have the capital to pick something up now, it may not be wise to assume that it’s a sure thing you’re going to have it in the near future.

Ask yourself these questions before you decide on layaway payments:

  •      Do I need the object in question?
  •      Is it a safe bet I’ll have the cash to pay for it very soon?
  •      Is my credit stable enough to be able to pay for it on an extension?

Only you can know for sure if layaway is a good idea for you, but make sure to think over your options carefully before you make a final decision.

Make the Right Choices with Money Ladder

If poor credit or no credit is influencing your decisions about what you can or can’t purchase, we’ve got good news for you: help is just around the corner. Money Ladder is committed to making sure that no matter what your means are or what your level of financial expertise is, you can receive all the wisdom and resources you need to make sure you’re financially prosperous for years to come.

If you want to know more about whether layaway is a good idea or not, speak with one of our Client Success Specialists about what Money Ladder can do for you by calling us at 1-888-585-8492. You have a lot of choices in this world when it comes to both methods of payment and financial guidance, so make the one that will serve you well and join the Money Ladder family today. 

 

THIS IS AN ADVERTORIAL AND NOT AN ACTUAL NEWS ARTICLE, BLOG OR CONSUMER PROTECTION UPDATE

* ​Please note that all calls with the company may be recorded or monitored for quality assurance and training purposes. *Clients who make all their monthly program deposits pay approximately 70-75% of their original enrolled debts over 12 to 60 months. All claims are based on enrolled debts. Not all debts are eligible for enrollment. Not all clients complete their program for various reasons, including their ability to save sufficient funds. Estimates based on prior results, which will vary based on specific circumstances. We do not guarantee that your debts will be lowered by a specific amount or percentage or that you will be debt-free within a specific period of time. We do not assume consumer debt, make monthly payments to creditors or provide tax, bankruptcy, accounting or legal advice or credit repair services. Our service is not available in all states and our fees may vary from state to state. Please contact a tax professional to discuss tax consequences of settlement. Please consult with a bankruptcy attorney for more information on bankruptcy. Depending on your state, we may be available to recommend a local tax professional and/or bankruptcy attorney. Read and understand all program materials prior to enrollment, including potential adverse impact on credit rating. The use of debt settlement services will likely adversely affect your creditworthiness, may result in you being subject to collections or being sued by creditors or collectors and may increase the outstanding balances of your enrolled accounts due to the accrual of fees and interest. However, negotiated settlements we obtain on your behalf resolve the entire account, including all accrued fees and interest. ​If you have any questions or comments about our disclosures as outlined above, you can contact us at: le***@mo*********.com