Posted on Tuesday, October 6th, 2015 at 7:00 am
It is only October, but Kmart already has commercials advertising their layaway. The commercials show Santa shopping at Kmart behind a woman in a Kmart shirt who is talking about their layaway program. It can be convenient to put things on layaway, just make sure that you don’t end up overspending.
Kmart layaway is not something new. The store has offered it for a very long time. The key thing to keep in mind with layaway is that it could trick you into spending more than you intended to. If you are paying attention, you can avoid that trap.
The Kmart layaway is easy to use. It allows customers to put items on hold – for a fee. Many people use it to reserve things that they want to buy as gifts for other people, but cannot afford to purchase all at once.
Bring the items you want to the layaway. Pay a $10 down payment. You will have to make a payment on those items every two weeks. You can have the items held for 8 weeks or for 12 weeks.
If you put items on hold for 8 weeks, you will have to pay a service fee of $5. If you choose to cancel your layaway you will be charged a cancellation fee of $10. Or, you can have the items held for 12 weeks. That option comes with a $10 service fee. If you cancel a 12 week layaway, you will be charged a $20 cancellation fee.
In other words, layaway is not free. You will need to spend either a total of $15 (for an 8 week hold) or $20 (for a 12 week hold). An 8 week hold requires you to make 4 payments (one every two weeks). A 12 week hold requires you to make 6 payments (one every two weeks).
It can be easy to lose track of the total amount of money you are spending just to have those items stored in layaway. Make an effort to keep track of what you spend. This will help you determine if layaway is financially worth it to you.
Try and pay your layaway deposit, service fee, and payments in cash. If you use your credit card, and cannot pay off the entire balance on the next bill, you will end up with an interest charge. That makes your layaway more expensive.
Don’t cancel your layaway. You will end up receiving a refund of your payments – minus the service and cancellation fee. You’ve now spent money to put items on hold that you didn’t end up buying. That’s a waste of money!