While the economy burns, self-appointed guardian of the downtrodden, Sen. Chuck Schumer (D-NY) has now lain his sites on layaway plans offered by retailers. In what is looking to be an already bleak holiday season for retailers, Schumer would have struggling consumers rack up even more credit card debt, rather than make purchases on an affordable payment plan, with a minimal hold fee of $5. For certain, consumers should avoid lengthy layaway plans on small ticket purchases, but the decision should be in the hands of the consumers, not an ever more intrusive federal government.
APNewsBreak: Senator warns of layaway's cost
ALBANY, N.Y. (AP) — The return of layaway plans this holiday shopping season is raising concern that the break frommight actually cost consumers far more.
For example, a rock 'n' roll Elmo doll that requires a $5 layaway fee and a 10 percent down payment for a month can equal a credit card that charged more than 100 percent interest, U.S. Sen.said Sunday.
Schumer is asking major retail associations to direct their members to more clearly present their layaway fees to customers. The Democrat says the ultimate cost of a layaway with a $5 fee can equal 40 percent interest over a month or two for many common purchases compared to the annual rates of most credit cards.