Family gatherings, drinking eggnog in front of the fireplace, the excitement of children eager to open presents, and credit card debt… these things are all synonymous with Christmas, right?

Each year, we scramble to buy gifts for our loved ones (and sometimes ourselves)… and since we don’t want to let anyone down or be outdone, we resort to putting gift purchases on credit cards. We figure we can make up for the extra spending in January, and pay off our credit card debt by the next due date.

If you’re like most consumers, things don’t quite work out that way.

When July rolls around, we can’t remember what we bought (or who we bought it for), but the credit card companies haven’t forgotten about our lavish purchases… and they’re still charging us interest on those purchases. If you’re only making minimum payments, you’ll probably still be paying for this year’s Christmas shopping five years from now.

Ugh.

I don’t know about you, but I don’t want to keep paying for my daughter’s Nintendo 3DS long after she’s tossed it in the back of the closet or let her best friend permanently “borrow” it.

So what’s a holiday shopper to do? How do you pay for holiday shopping without digging a deeper financial hole?

Over the next few posts, I’ll talk about some strategies for dealing with Christmas shopping without accumulating debt. You probably don’t want to wait, though, so here’s one strategy I’m using this year:

Layaway.

In case you’re not familiar with the concept, layaway involves paying a small service fee, plus a down payment (usually about 10% of the total purchase price) to hold your items. You them pay a percentage of the balance every week or two until you’ve paid the balance. No interest. No late fees.

When I was a kid, this was a popular way to buy items you couldn’t yet afford, mostly because credit cards weren’t as common as they are today. If I wanted a pricey toy, my mom would put it in layaway, and it was my responsibility to come up with the scratch to make the payments. If I didn’t do that, I didn’t get the toy. So you can bet I busted my ass mowing yards, cleaning gutters and scooping horse poop to make those payments.

Anyway, I thought this concept had gone the way of the pterodactyl. I mean, who the hell does layaway anymore?

Well, it turns out that some major retailers have brought back layaway in response to the seemly endless economic meltdown.

Wal-Mart, for example, offers layaway on most items.

KMart (remember them?) has a great layaway setup – you can layaway items on their website, and make online payments instead of driving to a retail location. When you’ve paid off your purchases, just go to the KMart location you’ve selected to pick up your items.

KMart charges $5 for layaway, no matter how many items you decide to buy. Compare that to the amount you’ll pay in interest if you decide to make your holiday purchases with a credit card.

Next time, we’ll look at another Christmas shopping survival technique you can use to stay out of debt (or keep from digging a deeper financial hole).

 

Photo: Myeralan