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With layaway making a comeback this holiday season, many consumers are wondering how it works and if they should in fact take advantage of this offer. Kmart, Wal-Mart, Best Buy, Sears, and Toys R Us are all offering layaway programs this year. Using a credit card is the best option if you are financially disciplined and have a low-interest credit card, but you can also take advantage of layaway. Layaway plans may seem advantageous for some purchases, but there are some very clear ways that layaway and credit cards are similar.

And you can even use your credit card to pay for your layaway payments. But the biggest benefit of a layaway plan is that you don’t have to overspend or hang your head in shame when your credit card bill comes.

Layaway allows consumers to pay for an item in many installments instead of upfront like with a credit card. But even with a credit card, you will end up paying off the balance in installments as well. With a credit card purchase, you borrow the money and walk away with the item that day, but with a layaway plan the store holds the item for the customer until he or she pays it off.

There is no interest with a layaway plan and the item is yours once you pay it off. But there are other fees associated with layaway. There is usually a small down payment ranging from $5 to $10, and you usually are not allowed to put a down payment on inexpensive items. For example, Wal-Mart has a layaway plan that requires that the person spend at least $50 before it is eligible for layaway, and also each item must be at least $15. With a layaway plan you have to pay off the item within eight to 12 weeks, if the transaction is not complete within eight to 12 weeks, then the consumer is subject to a $10 to $15 cancellation fee, the money that was put towards the item will be returned except for the initiation and cancellation fee and the consumer does not receive the item. With a credit card you can pay off the item at your own discretion.

Layaway is a great option if you are shopping ahead and want to make sure that your finances don’t get out of control this holiday season. But not all stores offer this great option; so always equip yourself with your low-interest credit card when doing your holiday shopping. Also, check your credit cards quarterly rewards, some such as Chase offer five percent cash back on electronics during the holiday season, so it might pay to use your credit card this holiday season.