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More Families Turning to Pawn Shops when Money gets Tight

Just about every household experiences it from time to time: money gets tight and there is no cash on hand until the next payday arrives. Unfortunately, though, many people cannot wait up to two weeks to take care of important expenses. More and more families are taking their possessions to local pawn shops to get cash loans to tide them over until the next paycheck gets deposited in the bank. Jerri Smith runs a household, and she said in a recent interview, “I am a single mother and I made less than $37,000 last year on my job and every now and then I need a little help. I don’t need a bank account or good credit to get a loan from a pawn shop. All I need is a valid ID and an item with ‘reasonable’ value.”

Smith is 30 years old, she works as a retail manager in the suburbs of Chicago Heights. She said that without loans from the local pawn shop she would have nowhere else to turn when she needs financial assistance. According to Smith, “My credit is bad so I can’t get a bank loan. I no longer have a bank account, which means I can’t get a payday loan either. And I don’t own my car so a title loan is out too.”

The economy has been improving as of late, but pawn shop managers say that middle class folks, like Ms. Smith, have become some of the most frequent customers at many pawn shops across the land. According to a manager at the Cash America Pawn location in Chicago Heights, “The majority of our customers are middle-class. Having somewhere to go for a quick loan is necessary during hard times like these.” The Cash America chain is operated by Fort Worth, Texas based company Cash America International Incorporated. They operate over 850 pawn shops in 21 different states.

At most pawn shops, people can purchase video games, electronic devices, DVDs and even jewelry. Business at these locations, like the Harvey Pawn location in suburban Harvey, remains consistent and is actually growing. Brian Thompson manages the Harvey Pawn Shop, he said, “Once the economy took a nose dive the middle-class was wiped out [financially]. There are three economic classes of people. There are the upper-class, middle-class and poor. Poor people are already used to not having much, but the middle-class is used to having a little something, and when that gets taken away they panic.” Thompson went on to say that he has issued loans on a wide variety of items, “The craziest thing I gave a loan for was a prosthetic leg. I normally would not accept an item like that but I found it so unusual I loaned the guy $50. It all depends on the item. A person could get $300 or $8,000 depending on the item.”

People from all walks of life and all economic classes are using pawn shops as a means to get short term loans. One regular at a local pawn shop, Marty Krammer said, “There’s this miff that only low-income blacks and Hispanics use pawn shops but that’s not true. I am a white, middle-class man and I use pawn shop loans to get by. After I lost my job as a bank supervisor I was unable to pay my mortgage and ended up getting a $1,300 loan for my gold and diamond watch.”

People never know when they will have a need for immediate cash, but no way of knowing how to get said money. However, with plenty of pawn shops doing business in the U.S., there will always be a way for willing consumers to turn their belongings into cold, hard cash.

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