Pay now, get later: The return of layaway

Facing a dismal holiday forecast, some merchants have exhumed a long-slumbering buying plan, layaway. Today's New York Times article, "The Last Temptation of Plastic" describes how Americans defected to the credit card in the '70s, preferring instant gratification and convenience.

In the 1960s, when I came of shopping age, all department stores offered layaway. I remember timing my payments to coincide with the big dance, when I'd have made the last payment on my twirly new skirt that very afternoon.

Layaway was great: no carrying charges, the assurance that the item was nestled in a backroom for you, the payments ticking down to zero. I had to discuss any layaway purchases with my parents. (You can get over your head with layaway, since the item would only be held for a number of months. Though you could cancel the whole deal and get your money back, my mother viewed backing out as a black mark on her reputation with a merchant.)

Layaway taught me to budget and save. With an item on layway, I was a most willing worker. I accepted gigs with the Blantz brothers, little twerps who had broken the spirit of several other babysitters, because their mother's dollars (including a lavish tip for hazard pay) would bankroll a new Villager skirt and matching cardigan.

Contrast these habits, which I have to this day, with the seduction of credit cards. When the rest of the family went on vacation last month, one of my sons was given a Visa card for emergencies. We just got the bill. Restaurants, clubs, taxis: he spent many hundreds of dollars, lured by the plastic promise. (He will be paying every penny, including interest, through a reduction in his weekly allowance.)

In an effort to compete with hipper bix box stores like Target, K-Mart has revived layway, after customers requested it. TJ Maxx and Marshalls brought back layaway, as has online retailer E-Layaway.com. 2008-era plans charge a modest restocking fee for a canceled purchase, but no interest.

Credit companies are betting we won't wean ourselves from our plastic addiction: average US household credit card debt exceeds disposible income. But layway may be the Obama of personal finance, coming from way behind, grabbing people's longing for change, and winning.