Shopzilla - eLayaway

ABC15.com | Phoenix, AZ

Check your calendars. This month marks 90 days before the start of the holiday shopping season. But instead of resigning to start next year in credit card debt... Consider a financial alternative that's a modernized throwback from the past.

Our partners at Shopzilla investigate online layaway. College student Alicia Carluccio finally got the TV she wanted. But she didn't go into any debt to buy it. She had heard about a layaway plan online so she could purchase it making payments once or twice a month. Then you would get whatever product your purchased.

Alicia used elayaway.com. It's an online service that allows you to pick out what you want to buy and pay for it in installments. Once your payments are complete, the product you picked is shipped to you. You get what you want, without the debt from a loan or credit card. According to Helen Malani, the chief shopping expert, shopzilla.com it helps keep you out of debt. "When you're walking away with a paid off product you have no debt. It's very liberating." Especially when you consider the typical alternative of paying with a credit card. Elayaway charges a one-time fee of 1.9% of your product's purchase price.For Alicia's $800 tv, that fee was about $16. She paid $146 a month for 6 months and owned the tv free and clear. Had she used a credit card to pay, here's what she'd be looking at.

The consumer credit counseling service says the average credit card holder pays a steep 18% APR. At that rate, instead of the $16 fee for layaway, she would have paid $40 to her credit card over the same time period. And if she opted for minimum payments on her card, like 10% of all credit card holders do, she would have spent $2,000 for that $800 tv, and it would have taken her 6½ years to pay it off.

Sergio Pinon elayaway.com said, "It doesn't add to the growing debt that people have already accumulated. It allows people to be responsible and it makes it convenient to be able to plan purchases that are seasonal."

Lay-away.com is another online layaway service that works a little differently. The company doesn't charge fees, but it makes commission off its sales, so that's built into product pricing. With a little bit of planning, and a willingness to delay instant gratification, you can save a lot with online layaway plans.

And creating a holiday spending plan now, can keep you from making impulse buys.

Just a little food for thought.

Shopzilla is a wholly owned subsidiary of the E.W. Scripps Corporation which also owns ABC 15.