What Is a Vacation Layaway?

Vacation layaway is a special type of payment program for vacations that allows consumers to pay the cost of a trip in installments. The lure is that travelers can avoid a heavy one-time charge that might but a burden on their bank accounts, taking on a regular payment schedule of smaller installments that might be easier paid with checking or debit accounts. Although it differs with each travel agency, there is generally no interest charged on the payments but there are service fees occasionally attached. There are downsides to a vacation layaway plan, including the chance that prices for the trip may actually drop in the time that the layaway takes place.

Even when their finances may be stretched to the breaking point, many people still like to get away for regular vacations. These people must find sensible ways to pay for these often costly trips. The thought of making a credit card payment for the entirety of the vacation’s cost may be daunting to some consumers. As a result, the concept of vacation layaway may be appealing to those people.

The typical vacation layaway plan starts with an initial down payment. From that point until the time that the completed payment is due, the consumer can make payments to cut down the balance of the total amount, which is locked in at the time the deal is struck, until it is paid in full. Some travel agencies even allow the amount of the interim payments to be flexible depending on how much the consumer can afford at each particular point in time.

There are many benefits to a vacation layaway plan. By spreading out the payments, it allows the buyer a chance to amass the money necessary for the trip little by little, usually by using paychecks from his or her job. In addition, the ability to make smaller payments allows the traveler the chance to pay by check or by debit card, since it is likely that they would have the necessary amount for the installments in their accounts. This saves them from using a credit card and paying the extra interest rate attached to that payment method.

Unfortunately, there are some drawbacks consumers should consider when deciding on whether or not to use vacation layaway. It might be more cost-effective to put the money needed to pay for the trip in a savings account, thus earning interest along the way. Also, there is a chance that prices for the trip could go down from the time the consumer locks in the price to the time the vacation takes place. If this were to occur, the consumer would lose out on those savings.