• Vacation layaways: One more way to pay for your trip

    By Suzanne Rowan Kelleher, msnbc.com contributor

    Sears jumped into the vacation layaway business last week with the launch of SearsVacations.com, offering an introductory sale of “100 vacations for less than $399" to destinations such as Orlando, Las Vegas, New York or the Caribbean.

    Smart? Maybe. But groundbreaking? Not so much. 

    Layaway has long been an option for an Outer Banks vacation rental or a Manhattan hotel stay. All kinds of trips can be paid off in installments at Suzi Davis Travel, an agency with nine offices in central Illinois and Missouri. And Gate1Travel.com reports that a whopping 60 percent of its clients have been paying with layaway. "You can lock in prices and the date you want to travel now and then make your payments toward your dream trip," said Marty Seslow, the online booking site’s vice president of sales and marketing. 

    Chris Morran, deputy editor at Consumerist.com, likened layaway to an old-school savings jar. “Harkening back to my childhood, if I wanted to buy something, my mom would tell me to put my allowance in a jar until I had saved enough to pay for it,” he said. “Layaway is the same idea. You’re putting money down and it compels you to be responsible about paying in advance.”

    Along with retailers such as Walmart and Marshalls, many travel companies started offering layaway plans in 2008 and 2009, when the economy began to tailspin and credit-strapped consumers looked for ways to avoid racking up debt. “During the financial crisis, some people were forced to do what is generally the best idea anyway, which is to save up and pay cash in advance for luxuries,” said Liz Weston, author of "The 10 Commandments of Money: Survive and Thrive in the New Economy."

    Putting a vacation on layaway may seem unusual to some, but it’s a payment option Sears customers have come to expect, said Shannelle Armstrong, the retailer’s director of public relations. “It’s simply another way to pay,” she said, stressing that Sears always strives to offer as many flexible ways to pay as possible. “Our customers can use layaway or a traditional credit card. Or they can pay with a Kmart, Sears or Lands’ End gift card,” said Armstrong.

    Under the right circumstances, putting a vacation on layaway can make smart financial sense, agree Weston and Morran. Still, each expert offered an important caveat. 

    “Any additional fees would be egregious. I wouldn’t pay,” said Weston. 

    Neither SearsVacations.com nor the four other travel companies mentioned charge a service fee for layaway.

    “It would never be smart to pay installments with a credit card,” advised Morran. “Unless you can pay it off right away, you’ll get hit with rolling interest on the back end.” 

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