Thursday, October 6, 2011

The Return of Layway

Sears and Kmart are the kings of the layaway world, with tons of options and programs. Here are three great options they offer:

  1. Shop online? Layaway online.
    You can put a wide variety of items from either store's website on layaway, as long as it's available for pick-up at your local store. You can retrieve your items after making your last payment. If you know exactly what you want (and especially if it's something your local store might not have), you can save yourself some time.
  2. Layaway is available in most stores.
    This allows you to pick out exactly the item you want, and ensures it'll be there waiting for you at Christmas. No snow delays here!
  3. Christmas Club program.
    Sears and Kmart each offer a Christmas Club program (Kmart Christmas Club is Here), allowing you to add money to a gift card progressively over the year. If you start early, they'll add a 3% bonus to any money you put on the card, and you can use this bonus after they load it to your card on November 24. If you're planning on a Craftsman set for that special someone, this is a great option to get some free money.

With more than one layaway option available, both Sears and Kmart offer plans that cater to your budget as well as your shopping preference.

Down Payment:
You'll have to put up either $15 or a specified percentage of the item's cost, whichever is higher. Sears requires a minimum down payment of 20% and Kmart requires 10%. There's also a $5 service fee added at the time of layaway. If you decide you don't want the item anymore, you'll be refunded your payment on the item up to that point, minus $10 as a cancellation fee.

Payoff Period:
You have eight weeks to pay down the balance in four payments. Kmart does offer a 12 week option for in-store layaway on total purchases of $300 or more, but you will be faced with a $10 service fee, a $20 cancellation fee, and a 10% down-payment. Sears offers 26 or 52 week layaway plans, but only for fine jewelry. If they don't receive your payment within 7 days after the due date, your item will be put back on the shelves and you'll receive a refund minus the fees.

Some items are prohibited from layaway, such as doorbuster sales, gift cards, and liquor. Don't expect to be able to put Black Friday deals on layaway. See the full list here.

Price Adjustments:
If the item you picked out goes on sale within 14 days of your layaway, you can ask for a one-time price adjustment. You can't price-adjust clearance merchandise.
Best Buy
Only select Best Buy stores are currently offering layaway, and it's not as good as what is offered at Sears/Kmart. You can only layaway a purchase of at least $250 and the service fee is 5% of the total cost, which can add up for expensive items.

Down Payment:
25% of the purchase price is required up front. This lowers your biweekly payments, but can lead to a bit of a sticker shock!

Payoff Period:
You are required to make a payment every two weeks, and you have up to 8 weeks to pay off a computer or 12 weeks for other items.

You can't layaway clearance items, promotional items, or post-paid cell phones, among other items. But otherwise the restrictions are pretty minor. Check here for details.

A better deal? If you've got decent credit, you're probably better off getting the Best Buy credit card, which currently is offering 0% interest for 18 months on any purchase $429 or up. However, if you don't pay it off completely in 18 months, you'll be stuck with all of the interest accrued for the entire period. Also, as with any credit card, make sure you are fully aware of the new credit card fees, which can put a serious hole in your wallet.

Unfortunately, Target has never offered layaway. However, if you're making a big purchase, you can score a great deal using their credit card. All purchases currently get 5% off, and you usually get a discount at the register for signing up on the spot. Check with your local Target to see what bonus they're currently offering. If you open a card, and can pay it down before the first interest payment hits, it's a great discount. Depending on your credit, the card will usually charge between 13%-23% interest, so it can certainly add up. If you would rather not open a new card and you have cash now, you can opt for the Target debit card, which is hooked up to your regular checking account, and you will still get 5% off all your purchases.

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