On Monday, we discussed the increase in seasonal work this year that could help a lot of families in the Chicagoland area during the holidays. While that additional income could make a real difference, this 2011 video from WNXV-TV addresses another issue that can cause problems during Christmas shopping: layaway plans.
Chicago Tribune consumer news reporter Gregory Karp noted in a column published on October 12, 2012, that on its face, layaway “seems harmless enough.” However, Karp said layaway is “illogical” and wrote, “Almost nobody should use it for holiday gift purchases this year.”
While many fans and proponents of layaway claim that such programs allow consumers to save on the interest they would incur by using a credit card, Karp called that a “straw-man argument.”
“Credit cards are not the alternative to using layaway,” Karp wrote. “Paying cash is.”
Karp also noted the statement of New York’s US Senator, Charles Schumer, who demanded last year that retailers display the true cost of layaway fees in credit card terms. Schumer said a $100 purchase with layaway fees can have the same effective interest rate as a credit card charging 81 percent annually.
“These layaway programs are nothing more than hideaways for sky-high interest rates that consumers would never tolerate with a credit card,” Schumer said in a news release last year. “The holiday season is supposed to be about giving and not taking, but these layaway programs are taking advantage of people and charging them outrageous interest rates, under the guise of making it easier and more affordable to shop.”
Karp also addressed issues with initiation and cancellation fees that can create additional headaches. As thousands of families all over Illinois prepare for the holiday shopping season, we encourage you to read the fine print of any layaway agreement you might be considering. And if foreclosure or credit card debt is already creating problems, you could gain some peace of mind by filing Chapter 7 or Chapter 13 bankruptcy before the end of the year. Timing could be a critical element to successfully filing Chapter 7 or Chapter 13, so it is in your best interest to take action today. Contact our firm now at (866) 930-7482 or fill out the form on this page to see let our Chicago bankruptcy lawyers see how we can help.
Benjamin Brand Services – Chicago bankruptcy lawyers