Charging purchases to your credit card may be almost “second nature” to you, as a convenience for your usual household and personal needs. But for an item with a hefty price tag—such as your engagement ring—we suggest you inquire from your jeweler (whether brick and mortar or online) about the installment plans they offer for payment. The two main options are most likely to be: have the installments charged to your monthly credit card bill or to put the ring purchase on their store layaway plan. Which one is right for you?
What is a Layaway Plan?
If are you unfamiliar with or unsure about a layaway plan, it’s basically a means to purchase a ring that you cannot or would rather not pay for in full at the present time. Payment is made through smaller, equal installments over a specified period (usually 12 months).
Installment payments are normally made in cash at the outlet where the layaway plan was entered into—although it seems some outlets do accept installments charged to your credit card. In the meantime, you are assured that your chosen ring is held in reserve for you until you have completed payments for the full purchase price.
How is It Different from a Credit Card Installment Plan?
There are pros and cons to both these options. But every couple’s situation and preferences are unique. So you need to assess whether the advantages of one plan outweigh its disadvantages in your particular situation. For instance, would you rather avoid interest charges, but you need to have the ring ASAP for your planned proposal date?
See our comparison of the main features of typical credit card vs. layaway plans below. Keep in mind what your particular needs are and what resources you have.
What are Some Jewelry Merchants that Offer Layaway Plans?
Below are 5 popular merchants for engagement rings, with our comparison of their layaway plan terms and conditions (as taken from their websites):
*APR = Annual Percentage Rate; charged once customer exceeds the agreed layaway payment period; percentage varies depending on the state
** Tiffany Select Financing applications are processed through Financial Network, Inc. on behalf of Tiffany & Co.
How Do I Know If a Layaway Plan Offer is Safe?
First of all, focus your engagement ring search among the better known, reputable jewelry stores and online merchants like those above. But should you decide upon a ring from a lesser known merchant, we recommend that you take these precautions before entering into a layaway plan.
- Check if there are any complaints against this merchant by contacting your local Better Business Bureau (BBB).
- Even if there are no complaints registered, you can conduct your own Internet vetting process. Use the keywords: merchant name + layaway + complaints.
- If the merchant passes 1 and 2 above, carefully study the details of their layaway terms and conditions to avoid any “surprises” (see below).
What Details Should I Look For?
Read through the layaway plan policy and check on such details as:
- When is each payment due? Does the due date fall within the time of the month when my funds will be available?
- Aside from the purchase price, are there additional charges that may apply?
- Does the plan allow me to pay some or all installments via credit card?
- Does it allow me to vary the monthly amounts paid, as long as I am able to settle the final balance within the payment period?
- What happens if I miss a payment?
- What happens if I can’t pay the full balance by the end of the agreed period?
- What is the APR in the state where I am making the purchase?
- Does the plan allow for exchanges or refunds? What limits or fees apply?
- What happens if the ring I chose is marked down within the payment period?
- If the price increases, is my layaway plan “locked in” at my agreed price?
So what do you think? Is it just too much effort and hassle to go the layaway plan route? Or do you see it as the one way you can afford to buy your dream engagement ring?
Or if you’ve used a layaway plan yourself, share your tips with our other readers. It just might be the financing option they’ve been looking for!