Pennywise: Layaway is back in fashion

After becoming nearly obsolete, layaway is making a serious comeback this holiday season. Thanks to the credit crunch, the buy-now pay-later mentality of credit cards has been replaced by frugal consumer spending and an unwillingness to take on more debt. As a result, many shoppers have turned to layaway as a financially savvy -- and manageable -- way to buy things.

Too young to know what layaway is (or don't remember how it works)? Here's a quick guide:

Pick out the items you want and head to the store's layaway counter. There you'll pay a small deposit or flat fee upfront, drop off your items and pay for them over time. Once the goods are completely paid for, usually over the next few weeks or months, you can pick them up and take them home. Unlike credit cards, layaway plans usually carry no interest.

Many retailers offer layaway services, including Kmart, Marshalls, T.J. Maxx, Burlington Coat Factory and, yes, even 99 Cents Only stores. Online options, such as eLayaway.com, are also gaining popularity.

The fine print:  Many stores place restrictions on what can be put on layaway (perishables and clearance items are some no-nos). A typical layaway term is 30 to 60 days, and there is usually a cancellation fee if you change your mind. Several retailers are setting deadlines by which holiday items must be paid off and picked up.

More information on layaway here.

-- Andrea Chang

Photo: Layaway counter clerk Tita Sabangan helps a customer at a Kmart in Burbank last month. Credit: Rick Loomis / Los Angeles Times