Welcome to The Times in Plain English   Click to listen highlighted text! Welcome to The Times in Plain English

Pawnshops Become “Poor Peoples’ Banks”

September 9, 2013
Plain English Version

Traditional symbol of the pawn shop.

Pawnshops are gritty places. People go to them to borrow against valuable possessions such as watches and rings. Now, times are changing. Some pawnshops are providing banking services.

Big banks are discouraging lower-income customers by making it hard for them to get loans. They are closing branches in some neighborhoods. They want customers who will add more revenue to their books.

Enter the pawnshops. They are sprucing themselves up to attract customers. They now offer services such as cashing checks, giving text alerts about balances and improved credit cards. They offer Western Union money transfers, and bill payments.

These services can come at considerable cost to low-income borrowers. First, pawnshops are still pawnshops. Their main business is lending money to customers based on the value of the object they bring in. The customer has a fixed number of days to reclaim the object. Customers pay back the amount they borrowed, plus interest. If they do not, the pawnshop can sell the item. Interest rates range from 2.5 percent to a high of 25 percent.

The “new” pawn shop.

Still, customers are made to feel comfortable in pawnshops. Some of the shops are setting up separate offices and lobbies for their “banking” services.

Because of the services they are offering, the number of pawnshops is growing. The economy has made banking very difficult for lower-income customers. Pawnshops are meeting the demand.

Advocates are telling consumers to use the new services with care.  Watch those interest rates and look out for hidden costs and fees. Borrower be wary!

Source: The New York Times

Print Friendly

In Brief

Selling Kids on Vegetables

How to get kids to eat vegetables? Marketing is the answer. You can call it tricks or just good ideas. Whatever works.

School lunchrooms are...

What Do You Call Yourself if Your Mother is White and Your Father is Black?

On the 2010 Census, President Barack Obama, identified himself as  “black.” But millions of Americans consider themselves “bi- or multi-racial.”  And their numbers are...

Mending Walls, By Robert Frost

Robert Frost (1874 – 1963) was a great American poet. Just before he died, he read his poetry at the inauguration of President John...

Pineapple on Pizza? The Global Debate

The President of Iceland started it. Last week he joked that pizza topped with pineapple should be outlawed. His remarks set off a debate...



  • dictionary
  • English Dictionary

Double click on any word on the page or type a word:

Powered by dictionarist.com
Click to listen highlighted text!