Is layaway a good option for you?

HOUSTON Layaway is back, as more merchants offer extended payment plans.

Consumer Reports has tested a lot of things over the years: TVs, plastic dishes, even men's socks. And now Consumer Reports ShopSmart is taking a look at a blast from the past - layaway.

"Today you can buy iPods, concert tickets, or even pay for your honeymoon on layaway. You put a bit of money down, pay for your purchase over time until it's paid off. And then you have your item or take your trip," said Jody Rohlena of Consumer Reports ShopSmart.

While stores like Sears, Kmart, and Burlington Coat Factory have had layaway for years, now they offer layaway online.

There's also E-Layaway that allows you to pay for items from Home Depot, sports tickets, or pet supplies over time. And with Lay-Away-Travel,you can pay for your vacation with installment payments.

"A big advantage to layaway is that you don't have to pay interest like with a credit card. But there are drawbacks," said Rohlena.

Many plans charge a cancellation fee, which can be as high as $150. Some even charge a service fee. And if the store files for bankruptcy, you lose your money.

"To shop smart when you do layaway, sign up for automatic billing. You're less likely to miss payments and lose your merchandise," Rohlena said.

If you're buying more than one item, be sure to bundle those into one order. That way if the store charges a service fee, you only pay once.

Toys "R" Us is another big retailer that recently started offering a layaway program. It's called Big Ticket Layaway and it's available for expensive items like children's furniture, bikes, and dollhouses.