Every summer my sister, my mom and I would walk down to Hills Department Store and spend the day picking out clothes for the upcoming school year.
When we were done, Mom would put them on layaway.
Most of my friends got their school clothes the same way, so we would return later, showing each other the stonewashed jean skirts and fluorescent sweaters we'd chosen. Oh, the excitement of knowing they would soon be ours and the agony of anticipation.
Once a week, my mom would walk a few dollars over from my dad's steel mill paycheck and, by the beginning of September, Karrie and I would each have our own brown package filled with clothes.
But once credit starting flowing like cheap wine, lots of folks decided they would rather have all their big ticket items right now and pay for them later. Through the nose.
They would slap down their plastic, bring home their Atari game system and start making payments. Those payments continued, even as the excitement of Space Invaders wore off and Coleco and Intellivision caught their eye. Before they knew it, the Atari was collecting dust in the basement, their cards were maxed out with Nintendo or Sega and they were still paying compounded interest.
Stores got into the action, too, pushing their own credit cards with sky-high interest rates and phasing out their more cumbersome, less profitable layaway programs.
But when the economy began circling the drain recently, people stopped buying things. Banks tightened up on credit. Lo and behold, layaway had a revival. Many stores brought it back, and Kmart, which never got rid of it, began a heavy advertising campaign in 2008, letting people know they offered the service.
Now, you can even shop online using layaway. Sites such as eLayaway.com and Lay-Away.com allow you to shop on their sites by category or on partner websites, such as the Apple store.
Some layaway sites don't charge fees, but receive commissions from retailers. Others charge consumers a fee from 1.9 percent to 3 percent of the purchase price. You can pay in small increments with your debit card or sometimes with a check or money order. Your order is shipped once you've paid up.
Online layaway is not without its pitfalls, though. Comparison shopping is pretty much limited to layaway-specific sites, which can have higher prices or limited selection. And you'll want to check each site's credibility with the Better Business Bureau.
Of course, using a credit card to buy items at a steeply discounted price on other websites such as Amazon.com can end up costing you even more money, after interest and fees come into play.
Indeed, you may be better off shopping online with established retailers who offer layaway at their brick-and-mortar stores. My BFF and her hubby bought both a storage shed and a pool on layaway through Sears online. They were even able to get price adjustments after the items went on sale.
Now that's MoneySmart!
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