Layaway Makes A Comeback During Tough Financial Times - CBS News 8 - San Diego, CA News Station - KFMB Channel 8

Layaway Makes A Comeback During Tough Financial Times

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In these tough financial times, you may have heard layaway is making a comeback. Just in case your grandparents aren't around to give you a refresher course, News 8 spoke to a financial expert about when layaway does and doesn't make sense.\r\n\r\nIt was during the Great Depression when layaway rose to popularity, and after going away for decades, it's back in a big way.\r\n\r\nThanks to shoppers like Alexis Douglas, layaway sales have tripled at a local Burlington Coat Factory. \r\n\r\n"Well for me, sometimes if I don't have the money, then layaway is there," she said.\r\n\r\nNow offered at stores like Sears, K-Mart, Marshall's and Burlington Coat Factory, layaway lets shoppers reserve holiday gifts before they have the money to pay for them.\r\n\r\nLinda Rossi from San Diego Metropolitan Credit Union says consumer confidence is at a 28-year low, so stores are offering a layaway lift.\r\n\r\n"They are trying to make it easier for you, and layaway programs, because they haven't been around for a long time, a lot of consumers don't know how they work," she said.\r\n\r\nTo find out if layaway really is a lost art, we asked shoppers if they'd ever even heard of it.\r\n\r\n"No, I haven't reallyÖ I shop when I can," one shopper said.\r\n\r\nAlthough every store has slightly different policies, at Burlington Coat Factory layaway starts with a $5 service fee, and another $5 if you cancel. Then the math works out like this: to layaway $100 worth of gifts, you need to pay 30 percent upfront, but then you've got 30 days to pay off the remaining $70. \r\n\r\n"Then you have no debt. You start the year debt-free," Rossi said.\r\n\r\nBut Rossi adds if you're a pro at paying off your debt every month, just use a credit card and spare yourself that layaway service charge.\r\n\r\n"Many credit cards offer a 25-day grace period on purchases, so if you purchase say on Dec. 5, you have until year end to make a payment before you begin to accrue interest," Rossi said.\r\n\r\nAnd remember, if you default on your layaway after making a few payments, although you'll lose the service and cancellation fees, you'll still get a refund on the rest of your money, either with cash or a gift card. \r\n
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