Wedding rings have huge emotional value, but many wedding rings also have a financial value. And a report by BBC News suggests that pawn shops are thriving as the credit crunch tightens. Jewellery, such as wedding rings, is often first in line to be pawned, despite the emotional value. But the fact people are pawning their wedding rings indicates how bad the financial situation is for many people in the UK.
Platinum Wedding Rings and Pawn Shops
But as cash becomes harder to come by, the BBC says more people are not only flogging items to pawn shops such as wedding rings, but they're buying jewellery too. As one customer of a pawn shop in London told BBC News: “If I buy gold, then I can use it as back-up if I need some money quickly...I don't know what I'd do without these guys.” The fact that people are so desperate financially that they'll pawn their wedding rings will come as a shock to many – in fact, there is a common perception that pawn shops are a thing of the past, a relic from the Victorian era.
But as the report shows, a percentage of people rely on pawnbrokers as banks become more hard-lined about lending; pawning wedding rings is a sad reflection of the fact that the financially vulnerable are most at risk during an economic downturn.
Platinum Wedding Rings: Alternative Credit
However, those that pawn wedding rings fully expect to buy them back, as one pawnbroker told the BBC, for some people, pawning wedding rings is “just like sticking a bill on a credit card.” Pawnbrokers date back to 15th-Century Italy and often flourish at times when it's necessary to find alternative sources of credit. In today's credit crunch, mainstream lenders refuse to help customers they deem as risky, leaving some with no choice but to pawn wedding rings and other jewellery items.
Increased job security saw the number of pawnbrokers fall drastically with the advent of the welfare state, but now the trade has witnessed several revivals – including one during the economic downturn in the early 1990s. The BBC reports that more people may be forced to pawn wedding rings and valuables as the economy is predicted to get worse – the National Pawnbrokers Association say the number of pawnbrokers is growing by 10% a year, and there are currently 800 pawnbrokers operating across the country.
Pawnbrokers increasingly only take wedding rings, diamond jewellery or other precious metal goods as electronics lose their value too quickly. Some say pawning a wedding ring is more cost-effective than taking out a loan, as rates of interest can be around 8% a month – less than an unauthorised overdraft.