Vacation 'layaway plans' take flight again

— -- Thanks to the credit crunch and staggering economy, an old-fashioned concept is gaining altitude with some travelers: the layaway plan.

A handful of companies have either introduced programs or report increased interest in existing plans, which let would-be vacationers make a deposit, lock in a price and pay off the balance in periodic installments. It's a twist on once-popular, bank-sponsored "Christmas clubs" and similar to layaway programs offered by such retailers as Kmart and Sears to appeal to a new generation of shoppers who are trying to avoid maxed-out credit and high finance charges.

But experts warn that in an era of rampant wheeling and dealing, even in high season, travel layaways can deliver more risk than reward — and regular, vacation-targeted contributions to a savings account might make more economic sense.

Tour operator Gate1 Travel and its sister company, Gutsy Women Travel, just launched a layaway plan that lets customers make a deposit of $100 to $200 and pay a flexible amount by check, debit or credit card until final payment is due (usually 45 days before travel for land tours and four months for cruises). Hurtigruten, a Norwegian small-ship cruise line, has a new "Layaway Getaway" offer with deposits as low as $99 and no-interest monthly payments; passengers must book by Dec. 31 and pay in full 45 days before departure but can cancel up to 70 days out with no penalty. This month, meanwhile, Hyatt Hotels and Resorts started selling certificates good for hotel stays and other services through a Florida-based website, eLayaway.com.

Though paying for big-ticket trips in regular installments by check or electronic debits rather than a high-interest credit card has its appeal, "it's critical for consumers to know who they're dealing with and consider the risk that if the company disappears, they'll probably lose the money they've put down," says the Federal Trade Commission's Peggy Twohig. The Fair Credit Billing Act lets those who buy with a credit card but fail to receive a product or service dispute the charge and ask for a refund, but other forms of payment don't have the same protections.