Shoppers at Kmart look at layaway plan itemsI'm old enough to remember when credit wasn't so easy to get. The only child of a single mother in the 1960s-1970s, things like credit cards or even apartment leases, were hard won in our experience. So when my mother qualified for a Sears' credit card, it was a pretty big day. At the time it was among the most difficult to qualify for, and its arrival meant my mother had finally established a credit history and attained a high rating. It was a big financial achievement.

Forty-five years later, wallets have become easily stuffed with plastic, and our collective debt has nudged many Americans toward financial ruin. Sears still issues a credit card, and while it no longer has the same cache, it -- and credit in general -- is a little harder to come by thanks to recent events. As retailers head into the critical holiday selling season, it's critical to find ways to get people shopping. One such method, issuing store payment plans, is once again gaining favor.

Last year, we saw the return of layaway, a trend being expanded for Holiday 2010. Sears too, has expanded its layaway program which now starts earlier in the season and gives customers up to 12 weeks to pay off their purchases. Both the eight and 12 week options require payments be made every other week, in store or online, and the longer time frame requires a minimum purchase of $400.

Now Sears is offering "even more ways to pay," and introducing the Sears Monthly Payment Plan. This lets you spread payments out over 48 months, something the company expects will help shoppers make bigger purchases like appliances.

"Our customers are still very mindful of how they are managing their spending and continue to look for ways to maximize their budgets," said Susan Ehrlich, president, Financial Services, at Sears Holdings in a statement. "The monthly payment plan is a smart shopping solution that makes it more affordable for customers to pay for large purchases."

But is it? You'll make 48 equal payments on purchases of $750 or more, on a plan with a fixed 12.99% APR. That's a lot of interest over four years. In comparison, layaway carries a $5 initiation fee and a minimum initial payment, but there are no finance charges. Sure, you can't get items for more than $400, but unless you've absolutely got to replace an appliance, or expensive supplies for a home improvement project or automotive repair, extended payment plans are little more than credit card debt, without the card.

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