Latest retail chain idea: “McCash”

Pawn shops have hit the big time. There are now national chains of pawn shops where you can bring in your valuables and get cash on the spot!

The biggest of these chains according to the New York Times is “Cash America” with 448 locations and $600 million in revenues.

The chain claims to have shed the seedy image of pawn shops we see in the movies. Uniformed staff and well appointed stores serve soccer moms and other typical Americans.

This is one more sign of Americans’ increasing use of debt to finance their lifestyles.

Pawnshops may be convenient but they ain’t cheap. Rates are regulated by state laws, but they would probably please your local mafia don. The low is 4% per month (about 50% per year) and the high is 25% per month (which is about $300% per year).

Pawnshops won’t waste time dunning you if you don’t pay on time, they will sell your TV or your necklace or whatever else you gave them for collateral. Maybe people prefer to see that happen than to get those terrible collection calls.

Cash America says more than half of its customers have a checking account. To them we say: Talk to your bank first. It may be more work, but they will probably give you a better deal.

Read more about Managing your Debt in Ask Jack About Debt’s Library

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