In what may or may not be a good idea, online travel agency CheapAir is offering finance plans for customers who don’t have the cash or credit to charge them now—but the plans charge interest for the loan.
CheapAir’s CEO says that it’s meant to “give everyone the freedom to travel” by allowing them to buy tickets now and, possibly, take advantage of sale fares that won’t be available later. The company’s plans allow for 3, 6 or 12-month plans.
But often, the best prices aren’t that many months out, and the interest rates range from 10% to 30%, which is more than most credit card rates. CheapAir believes there’s a market of customers who don’t qualify for or don’t want to use credit cards, but are reasonably good credit risks.
But a number of critics have pointed out that saving in advance for tickets and buying later will often produce the best results, and that the savings on a sale price can be eaten up by the interest. So, will ‘layaway’ become an industry trend? We’ll see.
