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Topic: Federal Trade Comission

Be Fully Informed Before using Layaway Plans to Purchase Gifts for the Holidays


WalMart, Toys “R” Us, And Sears Are Bringing Back Layaway Programs to Entice Shoppers to Purchase Big-Ticket Items Without Using Credit Cards, But High Fees Leave Consumers With A Raw Deal

Washington, D.C. – As Black Friday draws near, thoughts turn to holiday shopping, and how to get the items you want for a price you can afford.

If you don’t want to pay with plastic and you don’t have the necessary cash on hand, you may want to ask a merchant about a layaway plan. Layaway purchase plans are designed for people who want to buy products and services without using credit or paying the full price immediately.

Layaway programs allow shoppers to effectively enter into a payment plan with stores in order to make holiday purchases by making an initial down payment and paying a service fee, then paying the rest of the bill over a period of time, picking up the item when the bill is paid in full. These layaway programs, however, charge fees that when calculated as an interest rate, would far exceed even the highest rates charged by credit card companies – and in many cases would violate state usury laws. «Read the rest of this article»

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