Study: Bank Fees Target Low-Income Consumers

February 26, 2020 - Pawn Resources

Survey Results
(575 respondents nationwide)
Pawn shop regulars 2.5x as likely not to have a bank account
Why do low-income people avoid banks?


What percentage of people don't have a bank account?
What percentage of pawn shop users don’t have a bank account?
Visualization of overdraft fees
Pawn shop users are over twice as likely to incur overdraft fees
What other services are pawn shop regulars using?
What kinds of financial services do low-income people use?

Fast Facts

  • 32% of pawn shop regulars have no bank accounts, compared to 14% of Americans and 8% of American households. Why?
    • 67% say they don’t have enough money to open one
    • 37% say they don’t trust banks
    • 31% say there are too many fees
    • 15% say they have no time to open one
  • 70% of pawn shop regulars with a bank account have incurred overdraft or low-account fees, compared to the national average of 30%.
  • 48% of pawn shop regulars have also used a title or payday lending service
  • 39% of pawn regulars have used a check cashing counter
  • 30% of pawn regulars have used a payday advance store
  • Just 10% of pawn regulars have used an online peer to peer lending service, like LendUp.
  • 77% of pawn shop regulars with a bank account rely on their phone to check their bank account.

“Pawn shop regulars are jaded by their experience with banks. Banks want to extract as much cash as possible from low-income people. They levy high overdraft and low-account fees, and make them difficult to opt out of. This discourages millions of Americans from getting a bank account, undermining their long-term financial stability.” –Jordan Birnholtz, PawnGuru co-founder.

David Stiebel
David Stiebel

David Stiebel is one of the cofounders of PawnGuru. David was educated at MIT, where he studied Math. He subsequently worked at Bain as a data scientist before starting PawnGuru in 2015. He started PawnGuru to build a better tool for pawn shops and consumers to connect.

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