Issue Date:  -  Wednesday, 24 October 2001

Don't fall into the credit trap

Smart consumers can avoid falling into the credit trap this Christmas by placing their goods on lay-buy now, Consumer Protection Commissioner Pat Walker has advised.

"It is easy to get caught out by the speed at which Christmas creeps up on us and give in to the temptation of buying gifts on credit," Mr Walker said.

"Using the lay-buy system is a much smarter option because not only do you avoid paying interest, the shop holds the goods for you until you decide to collect them."

"Christmas is just nine weeks away, so now is an excellent time to use the lay-buy system and avoid hefty credit card interest."

When placing goods on lay-buy consumers pay an initial deposit of around 10 per cent to secure the item, then make regular payments toward the completed contract price. The term of the lay-buy depends on the store.

"Consumers have to be aware that a lay-buy is a legally binding contract so if you fail to make payments, or changes your mind about the goods, the trader has the right to claim "fair damages"," Mr Walker said.

"This does not necessarily mean you'll lose all of the money you have paid, however the trader can claim their costs."

"With credit card interest rates averaging around 16 per cent lay-buy is certainly a better way to prepare for Christmas."