Boston Pawn Shop Favorite of Un-Banked and Under-Banked Individuals as an Alternative to a Financial Institution
A recent FDIC – Federal Deposit Insurance Corporation – survey conducted along with the US census bureau has indicated that approximately one fifth of South Florida households have no, or limited access, to banking services.
These results are in comparison to the national average of more than one-in-four people who are under-banked or un-banked. This particular survey considers households un-banked if they do not have a checking account or savings account. Under-banked households have accounts, but they primarily used alternative financial services such as non-banking check-cashing, pay day loans or a Boston pawn shop.
The FDIC survey generated 47,000 responses. In South Florida, 8.4 percent of households are un-banked compared to seven percent in Florida and 7.7 percent nationally.
A pawn shop works in two different ways: an individual will bring in their valuable items such as a piece of gold jewelry or a musical instrument and the pawn shop will hold the item for a predetermined amount of time for a certain amount of money loaned to the individual and then at the end of that amount of time, the individual brings back the money, with interest and receives their valuable back.
Another way a San Francisco pawn shop works with people looking for quick cash is that they bring in their valuables, gold jewelry or electronic videogames, and the pawn shop purchases it out right – gives the owner of the valuable money and in return keeps the valuable to sell in their store front.
Many people prefer a pawn shop for receiving quick cash because a pawn shop will not run a credit check like a bank does; in addition, a pawn shop will lend smaller amounts of cash – not checks – that a bank will not even consider. For example if a person needs $200 for an overdue utility bill, they can bring in a valuable, such as a piece of gold jewelry or a computer, and receive close to the $200 for their expenses. A bank will not loan anything less than $1,000 or sometimes $5,000 or more and require large collateral like a car or house.