More retailers are offering or bringing back layaway leading up to Christmas and Hanukkah, including Toys R Us, KMart, Burlington Coat Factory, and Sears. But is layaway a savvy financial decision?

The latest issue of ShopSmart magazine, put out by Consumer Reports, debates the payment option.

Pros:

• Spreading a major purchase over multiple pay checks
• Gets you dibs on hot items that might sell out when (and if) holiday shopping heats up
• No need to hide presents because the store keeps them until you are paid up
• Incentives to set aside money and keep paying the bill – otherwise you lose everything!
• Cheaper than credit card interest if you pay off the purchase over multiple cycles

Cons:

• Some layaway plans come with fees to participate, from $5 to $150-plus
• Some stores honor at least one price adjustment, but within a specific time frame,  meaning you could lose out on the lowest price offered
• You lose the money you have paid if you stop payments!!!
• If a store goes out of business you are hard up.

Does layaway make sense for you? For me it doesn’t. I don’t have any major items on my Christmas list and I’m already saving up for holiday spending. Plus, I’m good at paying off my credit card every month.

Are you considering layaway?