Bensman Risk Management, Inc.


Insurable Interests

Bensman Risk Management, Inc.
2333 Waukegan Road Suite 275
Bannockburn, IL 60015
847-572-0800 Phone
847-572-0502 Fax

Insurable Interests may offer general financial, insurance, tax and business ideas. However, due to the ever-changing tax laws as well as the complexity of the financial industry, you should seek professional advice before implementing any of the ideas contained in this newsletter. The Bensman Group, Bensman Associates Ltd., Bensman Risk Management, Inc. or Schemata, L.L.C. assumes no liability whatsoever in connection with the use of this newsletter.

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Securities offered through Kestra Investment Services, LLC (Kestra IS), Member FINRA/SIPC. Investment Advisory Services offered through Kestra Advisory Services, LLC (Kestra AS). Kestra IS and Kestra AS are not affiliated with The Bensman Group, Bensman Associates Ltd., Bensman Risk Management, Inc. or Schemata, L.L.C.

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Insurable Interests

Vol. 9, Issue 2October 2013

FINANCIAL INTERESTS

Pros and Cons of Layaway

You might remember that years ago, many people who wanted to buy a big-ticket item for the holidays – or any time – often bought it on layaway. They made regular payments to the store until they had paid the full cost of the item, and then they took it home.

With the advent of easy credit, most people opted instead to take the item home immediately rather than waiting until it was paid for. But when the Great Recession hit, a lot of people realized they had put way too much on their credit cards, and layaway came back into vogue.

Major discount retailers – including Wal-Mart, Sears, Toys and Babies R Us, and others – as well as some local or regional department stores offer layaway plans and expect to see many shoppers take advantage of them during the holiday season. Some online retailers also have layaway options. Not all stores offer layaway, though, and even stores that offer it don’t always offer it on every item.

So might layaway be for you? If you are interested in an item that you cannot afford to pay for in full, it can be a way to avoid credit cards – and the interest on carrying a balance. It also can let you spread your holiday spending out over several months and avoid the post-holiday bill-paying shock.

Generally, you put a percentage of the amount down to hold the item, then you pay a set amount at regular intervals. Some stores charge a small fee to open a layaway account, and many stores charge a fee if you cancel your layaway order.

In addition, you usually pay whatever the item cost at the time you bought it. In other words, if the item goes on sale – either at the retailer where you bought it or at another retailer – you usually do not get to take advantage of the sale price. However, you also don’t need to worry that a popular item will be out of stock by the time you are ready to buy.

If you decide to use layaway, experts suggest that you make sure you understand all the terms:

  • How much do you have to put down initially?

  • Is there a fee for opening a layaway account?

  • When are your payments due, and how much are they?

  • How do you make the payments? Can you make them online or by mail, or do you have to come to the store?

  • What happens if you miss a payment or are late?

  • What happens if you change your mind and no longer want the item? Some stores charge a cancellation or restocking fee, some give you a cash refund for all the money you have paid, and some refund your money but as a store credit.
Finally, keep track of all the payments you have made, in case there is a dispute with the store about the status of your account.

This article was created by Osmosis Digital Marketing for use with permission by The Bensman Group.

Photo: iStockphoto.com

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