Going on Vacation? Now You Can Put it on Layaway

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Paul Sakuma / AP

Sears is now offering vacation packages that consumers can pay over time.

Layaway used to be reserved for big-ticket items like televisions or leather couches. Now, you can use it for your summer vacation.

On Wednesday, Sears will unveil searsvacations.com, a new site and service in which customers can book hotels, cruises, car rentals and flights, as well as 100 pre-paid vacation packages starting at $399. And you put any of those packages on layaway. (The site appeared to be up and running on Tuesday.)

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In the last year, layaway has been making a comeback, most notably around the holiday season. Walmart brought back its layaway option in time for Christmas after retiring it five years earlier. But even before then, Sears, Toys R Us, TJ Maxx and Best Buy had also revived their programs.

The reason? Since the recession, consumers have had a harder time getting access to credit cards, and many retailers saw an opening to finance purchases over time that seemed to have closed a few years ago.

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The one big problem with layaway: it’s often not a smart financial move. One study has shown that consumers who use a credit card over layaway will end up paying less interest on the purchase, even on a card with a high APR.

The one positive aspect of choosing layaway over using a credit card is that there’s virtually no way consumers can get buried in overwhelming debt in the same way they can when using plastic.

Before jumping at Sears’ vacation layaway plans, make sure you know what you’re getting into. Read the plan’s fine print, know precisely when your payments are due and how much time you have to pay off the purchase. Plus, figure out what Sears’ fees are for late payments and whether you’ll have to pay any additional travel booking fees. For hotels and cruises, Sears says there are no fees added, but a booking fee may be charged to air reservations.

But even before all of that, consider whether taking a vacation this year is a wise move. Because if the only way you can afford one is to work out a layaway plan, maybe this summer you should consider staying home.