| Tuesday, April 22, 2008 |
| Who's Making Money Now? Pawn Shops |
 ABC News: Pawn Shop Prosperity highlights the boom times Pawn shops are currently experiencing. People are heading to them for everything from PayDay Loans, to sell gold, or the more traditional loan of cash secured by a household item such as a TV, musical instrument, etc.
The Pawn Shop featured in the story looks more like a retail store than the slightly shady looking establishments common around Boston. The customers seen pawning items spoke of needing cash for things like gas, food, mortgage payments, etc. "People use us typically for short-term emergency needs or unexpected bills that they have and they're glad we're here to help," Feehan said. "If they've got a unexpected medical bill, extra high utility bill in a particular month, or their car, their transmission's out, they need some help just to get from there to the next payday."
If that's true, Linda Crook and her son Jeremy are the exception. They came in to sell stereo headphones now that she's lost her job. She's trying to keep their home.
"I've never been in a pawn shop, never," Crook said. "I've been bawling all morning because we didn't have any money. I got laid off from my job in a homebuilder after all these years."
Cash America says its average pawn customer comes in two to three times a year and gets $100 each time. For payday customers the average is $300 and they'll pay about $15 or $20 for every $100 borrowed for 30 days.
Feehan says that's equivalent to an annual percentage rate of 240 percent. |
| posted by Boston Gal @ 7:40 AM *
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| 2 Comments: |
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This is sort of a sad commentary on the economy. I heard that when times are bad, Repo men also make lots of money.
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Pawn shops and establishments that offer small amounts of cash for a short period of time exist to meet the needs of those who are in a temporary bind or have an unforeseen circumstance arise. It is very unfortunate that the economy is in such a state that people are having to flock to alternative financial services facilities to make up an income void but it is fortunate that these places exist for responsible consumers
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This is sort of a sad commentary on the economy. I heard that when times are bad, Repo men also make lots of money.