Lay-bys on the rise as Aussies dodge credit cards

With credit cardinterest rates remaining stubbornly high, many Aussies are turning to lay-by finance to pay for big purchases.

Speaking to the Sydney Morning Herald, Layby Services Australia chief executive Terry Seremetis said that the market for lay-by, where you put a deposit on goods and then pay for it in installments while the shop keeps hold of it, could be around $2 billion already.

"There is a goal to aim for and a reward at the end – unlike credit cards and loans, it avoids the risk of getting into debt," he said, explaining the popularity of the product at a time when millions of Aussies are trying to clear their credit card debts.

New online lay-by companies are also making it easier for people to avoid running up debts on their credit cards by paying in regular instalments, he added.

Those struggling with credit card debt may take a little comfort in the news that Aussie has brought its credit card interest rates down in line with this week’s 25 basis point cut from the Reserve Bank.

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