what is layaway 
layaway is a way of buying something in which a consumer makes a down payment on an item which the store then holds for them while they pay the remainder of the price in installments after which they take possession of it a layaway plan ensures that the consumer will get their chosen merchandise when they ve fully paid for it 1understanding layawaylayaway works for consumers who have limited disposable incomes and are unable to make larger lump sum purchases there is sometimes a fee for this because the seller must keep the item in storage until the payments are completed with little risk involved for the seller layaways can be readily offered to those with bad credit if the transaction is not completed the item is simply returned to the shelf the customer s money may either be returned in full forfeited entirely or returned minus a fee 1layaway programs also benefit retailers by allowing them to offer products to lower income customers as a type of savings plan because the customer has already made a commitment to purchase the product on layaway they cannot succumb to the temptation to spend that money elsewhere online layawayonline layaway programs let consumers purchase items via scheduled deductions that are taken from a checking account online layaway simplifies layaway for both merchants and consumers by removing associated storage and bookkeeping costs the layaway items remain housed at the distribution center during the layaway period rather than taking up valuable retail warehouse space 1retailers often restrict layaway purchases to more expensive items such as jewelry and electronic goods smaller items such as toys are typically unavailable for purchase through layaway programs layaways vs credit cardsthere are both similarities and differences between layaways and credit cards layaways and credit cards are each used to purchase an item that an individual cannot currently afford both have late payment fees as well as penalties for default both also allow for payment in installments over a certain time period one of the differences between the two is that with a credit card an individual can take home the item they purchased right away with layaway an individual can only take home an item after they have fully paid for it layaway requires a deposit whereas a credit card does not depending on the layaway you do not pay interest on the unpaid balance with a credit card you do which can quickly increase the cost of a purchase and send individuals into credit card debt if you default on a layaway plan it will not impact your credit score whereas on a credit card it will 2 also you do not need good credit to use a layaway program but you do need good credit to receive a credit card or at least good terms on a credit card credit cards are usually a better option if you can pay off your balance in full the next month and not accrue interest credit cards allow you to build a positive credit history take advantage of rewards plans by which you can earn points or cash back and receive your item right away however if you can t pay your balance in full the next month layaway can be a better option to avoid accruing the high interest debt associated with credit cards the origin of layaway plansthe advent of layaway plans came during the great depression of the 1930s when most individuals and families were suffering greatly financially it stayed popular until the 1980s when the increasing availability of credit cards began to make it superfluous for example in september of 2006 walmart ended layaway service after 44 years according to reportage by npr the company blamed declining demand and escalating costs 13however in september of 2011 wal mart resumed the service due to new financial difficulties brought on by the great recession and subsequently increased consumer credit constraints however it was only brought back for the holiday season 4 it remained in place until 2021 when walmart once again discontinued its layaway program replacing it with a buy now pay later bnpl program called affirm 5in essence the affirm program lends customers the money to buy their item which they don t have to wait to take home they repay the loan with regular payments over a set amount of time anywhere from three to 24 months depending on the size of the loan items available for such financing include electronics video games tools toys musical instruments jewelry home improvement and apparel 5though there are some 0 promotional interest rates available the offer generally comes with interest rates ranging between 10 and 30 creating an affirm account will not affect your credit score but purchasing an item with it could these features differentiate the program from other bnpl offers making it more like using a credit card however unlike credit cards affirm does not charge fees of any sort 5