Wal-Mart's Layaway Plan Sucks

Wal-Mart’s Layaway Plan - NYTimes.com

Wal-Mart’s press releases suggest that the restoration of the layaway program, which was discontinued in 2006, is meant to help its customers “budget” so that Christmas can be “worry-free.” The company is partly playing on the economic insecurity of its customers, and partly on the national nostalgia for the days before credit-card debt. But the truth is, the program is a bad deal for everyone — except Wal-Mart.
Why? Because the charges stack strongly in Wal-Mart's favor and you'd be better off putting a $100 purchase on a credit card and paying it off that way, at half the interest rate Wal-Mart is effectively charging.

Come on now, did you really think Wal-Mart was going to put anything in place to actually HELP it's customers? Hell no, they will do anything to help you spend more money in their stores but beyond that they really do not care in the least.
Imagine a mother going to Wal-Mart on Oct. 17 and buying $100 worth of Christmas toys. She makes a down payment of $10 and pays a $5 service fee. Over the next two months she pays off the rest. In effect, she is paying $5 in interest for a $90 loan for two months: the equivalent of a credit card with a 44 percent annual percentage rate, a level most of us would consider predatory.

In comparison, even a card with an 18 percent A.P.R. would charge only half as much interest — and she could take those presents home the same day.

Then consider what would happen if she couldn’t finish all the payments. Wal-Mart would give her the money back, less $10. If she borrowed that $90 and paid $15 in interest for two months, she would have the equivalent of a jaw-dropping interest rate of 131 percent.

Shop at Wal-Mart and find yourself spending more than you think for less than you think and the lion's share of those dollars are headed straight into China where they will be used to continue to exploit an entire nation of people. Wow! Awesomeness!
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