Lucky Magazine, November 17, 2011, Thursday

Lucky Magazine

November 17, 2011, Thursday

Lucky Magazine (full article)

Should You Try Layaway?

As credit limits continue to drop, more cash-strapped consumers are considering layaway as a gift shopping possibility. The installment pay-plan (which originated mid-century as an option for low income families) has made a comeback this season in superstores such as Walmart, Kmart, Sears and Toys 'R' Us.

At first look, the offer seems ideal: pay a little bit at a time and get your presents before the holidays—everyone wins, right? Maybe not, according to Louis Hyman, an assistant professor of history at Cornell University’s ILR School and author of Debtor Nation: The History of America in Red Ink. His research shows the hidden fees of layaway are actually much steeper than credit card interest rates.