Layaway is only going to get more popular in the future, and that's why we need to fight for transparency – and even regulation – if we have to.
Los Angeles, CA (PRWEB) December 20, 2011
Layaway plans, marketed this holiday season as an affordable alternative to credit cards, cost consumers much more than they know. According to a report published today by leading credit card intelligence firm CreditCardAssist.com, the holiday layaway plans offered by retailers like Wal-Mart, Sears and T.J. Maxx target lower-income consumers with the goal of triggering impulse buys, and customers will pay as much as 136% interest on their holiday purchases.
During the Great Depression, layaway became popular with consumers because it allowed them to pay off purchases in installments without the risk of going into debt. It largely died out when credit cards took over the market in the 1980's.
“Credit cards scare Americans right now,” says CreditCardAssist CEO Bill Hazelton, “and these stores are keying in on the fear of debt. But the service fees and minimum purchase requirements of the new generation of layaway plans make them much more expensive than simply buying a purchase on a credit card.” The devil, Hazelton says, is in the details.
For instance, the $5 fee that consumers must pay to reserve the minimum $100 layaway purchase at Sears amounts to a 39% interest rate over the 8-week repayment period. That’s an especially large price tag when you consider that layaway’s biggest targets are low-income, cash-only families.
In order to help consumers understand the true costs of their holiday purchases, Hazelton asks that Americans support Sen. Robert Schumer’s (D-NY) campaign to force retailers to advertise the total costs and interest rates of their layaway plans in the same way that credit cards have to under the CARD Act of 2009.
“Layaway is only going to get more popular in the future,” Hazelton says, “and that's why we need to fight for transparency – and even regulation – if we have to.”
The report is the latest accomplishment in a long career of consumer advocacy for the CreditCardAssist founder, who has been advising consumers and business owners on the perils of the credit industry since 2004. Under Hazelton’s guidance, CreditCardAssist has grown into one of the leading credit card information resources on the Internet, and its on-site reports have been cited by the San Francisco Chronicle, the New York Post, Yahoo! News and more.
To learn more about CreditCardAssist.com or to schedule an interview with Bill Hazelton, please email Matt@Contentfac.com or call (724) 747-9792. More information and the entire report can be viewed here.