San Diego, California. – The hit to the consumer by inflation seems to be increasing this year the number of families who go to pawnshops to get loans or perhaps make a few purchases.
“We have increased 33% of pawns in a year, normally the regular increase is 10%,” explained Moris Arato, owner of the pawnshop CashCo Pawnshop in City Heights.
He added that he suspects it is high inflation that has driven more people through his doors. Including, he says, employers wanting to pay their employees.
“A pawn shop gets you out of trouble right now, it’s cash in your hand right now,” said Arato, pointing out that last year, several government subsidies helped many families stay afloat.
Seniors hit by inflation rates are likely to see a big boost in their Social Security checks starting next year.
But this year, he added, this type of help does not exist, so many families continue to struggle financially, struggling just to make ends meet. “People take money for errands, they take money for gasoline, that’s what many of us are hearing, errands, gasoline and rent,” explained the businessman.
This option can be a temporary solution for certain families who are tightening their budgets or suddenly faced with an emergency.
Of course, you have to be aware of what the cost could be when taking out the loan and realize that the pawned item could be lost if you do not pay the debt. Typically, you would repay between 20-25% of the amount borrowed, but that percentage can vary.
“You pawn something, your jewelry or your article, we give you, say $100, you pay $120 or $125 in four, five or six months. If you can’t take it out, you can (defer the loan) for another four, five or six more months and if not, let it go and it won’t affect your credit at all,” explained Arato.
We emphasize that, like any type of loan, it is extremely important to be well informed about the terms of the agreement and thus know exactly what it will cost you to take the money.
Arato tells us that purchases at pawnshops are also on the rise due to inflation. The merchandise is usually cheaper and provides greater peace of mind to the consumer than other places since it is checked by the police to confirm that they are not stolen.