Unearth Your Fortune

By Maddy Scheckel

February 21, 2023

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The average American is drowning in $5,525 of high-interest credit card debt.

This means that if you need to borrow money, you’ll have to go into more debt, and it will likely take multiple years to pay off.

But buy now, pay later platforms like Klarna can help. 

Klarna lets you borrow up to $10,000 in personal loans. And most of their loans are interest-free! 

So if you’re sick of high-interest debt, keep reading. 

Below, I provide you with an in-depth explanation of what Klarna is, how it works, and several Klarna reviews to help you make confident financial decisions. 

What Is Klarna?

Klarna is a buy now, pay later (BNPL) service that has a mobile app, browser extension, and in-store shopping options. 

They offer personal loan options like

  • Pay in 4
  • Pay in 30
  • Six to 24-month loans

Klarna is commonly known for its Pay in 4 payment option, where you can pay 25% of the purchase price at checkout and 25% every second week for six weeks.

This is a convenient choice for anyone looking to make a large purchase without paying interest and fees.

The Pay in 30 payment plan is a practical alternative if you need flexibility. Instead of sticking to a schedule, Pay in 30 allows you to pay for your items anytime within 30 days, interest-free.

Klarna also has traditional personal loans that you can use to buy more expensive items and pay them off over six to 24 months. The interest rate on these loans depends on your credit score but normally ranges between 0% – 28.99%.

Klarna’s buy now, pay later app has everything shoppers need all in one place

Although I recommend paying for products in full whenever possible, if you’re sure you can pay the installments, Klarna is a good choice.

Tip: Klarna earns money by making your checkout total look smaller and encouraging you to buy more. So be aware of this and avoid using Klarna regularly, as the frequent bank charges can easily become overwhelming.

What Is The Klarna Card?

Klarna also offers the Klarna Card. It’s like a credit card, but shares buy now, pay later characteristics such as zero interest or late fees.

You can use it in-store wherever Visa is accepted, as you would with a regular credit card.

This lets you split your checkout total into four payments. Users posting Klarna reviews also love how low the monthly fee is. It’s $4.99 per month, which is far cheaper than most credit cards.

User’s view of Klarna Card dashboard in the Klarna app Source: Klarna

Once you’ve made a purchase, head to your mobile app, and you’ll find your payment history alongside reminders of when to make your next payment.

What stands out about this card is the rewards. In addition to the points you get after buying products, Klarna encourages you to complete “Missions.” These missions are small tasks in the app that allow you to earn more rewards.

How To Use Klarna

Are you thinking of signing up for Klarna? Awesome! 

Follow this five-step guide on how to use Klarna to get started:

  1. Sign up for an account
  2. Get approved
  3. Buy from your favorite stores
  4. Track your order, payment plans, and returns
  5. Pay your installments

Step 1: Sign Up For An Account

Sign up for a Klarna account by downloading the app and providing information like your

  • Mobile phone number
  • Email address
  • Current billing address
  • A debit or credit card

Klarna will conduct a soft credit check but don’t worry; this won’t harm your credit score. Also, you can still qualify if you have a zero credit score since Klarna doesn’t have minimum credit requirements.

Step 2: Get Approved

It takes less than 24 hours for Klarna to review your profile, conduct a soft credit inquiry, and approve your account. This short turnaround time can come in handy if you need money fast.

Although, there is a drawback. Like Afterpay, Klarna restricts your card usage and will reject purchases if it thinks you’re buying too much too soon. 

But you can increase your eligibility for purchases by:

  • Building a good payment history
  • Paying off your balances
  • Lowering your checkout cart value
  • Connecting Klarna to your bank account (Note: this option is only given when Klarna needs a better understanding of your current ability to pay back loans) 

Step 3: Buy From Your Favorite Stores

Klarna works anywhere Visa is accepted. Some of the most popular stores that accept Klarna include:

  • Nike
  • Urban Outfitters 
  • Fanatics
  • Instacart
  • Vivid Seats

Since Klarna works directly with these retailers, you’ll get discounts that are hard to find elsewhere. For example, you can get up to 60% off eyeglasses with Frames Direct by using Klarna. 

Shop with Klarna online and in-store at their partner stores Source: Klarna

However, shopping with Klarna can be tricky. Upon checkout, I used to find myself going back and buying more products because my total looked so low. If I was buying something worth $100, I’d only have to pay $25 that day. 

In other words, even though your total seems low today, it doesn’t mean you should buy more than you need. 

As a rule of thumb, I only use Klarna to buy big-ticket items. This limits the frequency of payments, making it easier to manage and pay off my debt.

Step 4: Track Your Order, Payment Plans, and Returns

Once you’ve bought something using Klarna, it’s time to track your order. 

Klarna has in-depth tracking features, so you know exactly where your shipment is.

To enable delivery tracking, head to the “Deliveries” tab and click “Get Started.” Klarna will ask you to confirm your email, and you’ll be able to track, add, and mark orders from your Klarna dashboard. 

You can also return an order through the Klarna app without visiting the merchant’s website. This is a convenient feature if you’re buying from smaller websites with less efficient return policies. 

All you have to do is go to “Orders,” choose the items you want to return, and select “Report Return.” From here, Klarna will automatically adjust your payment plan.

Step 5: Pay Your Installments

With the Pay in 4 payment plan, Klarna sets up autopay for you, so you don’t have to remember to make payments every two weeks. 

But if you choose the Pay in 30 plan, you have the freedom to pay anytime within 30 days of purchase. For example, you can pay your account in full the day after buying something or make four weekly payments.

Klarna also offers longer-term personal loans for up to 24 months. So, it’s a good option if you’re buying big-ticket items like a new couch, refrigerator, or gaming setup that you want more time to pay off.

Klarna has a rewards club that allows you to earn free money every time you shop. Although you only get one point per dollar spent, this can quickly add up if you make large purchases. These points don’t expire, so you can save them for a rainy day or to treat yourself.

Keep in mind that Klarna charges a $7 late fee if you make a payment ten days after your due date. These late fees are capped at 25% of the original purchase amount. 

As always, I’d recommend making your payments on time to avoid extra fees altogether. 

Is Klarna Legit?

Klarna is a legit app, with an average of 4.1 stars on Trustpilot’s online review forum, making it one of the highest-rated buy now, pay later apps. Most customers talk about how secure and easy to use the platform is, while others love Klarna for its diverse range of stores.

I also noticed that the support team responds to all negative Klarna reviews on Trustpilot, in the App Store, and on Google Play store pages. This shows they make an effort to try to resolve issues and ensure customers have a positive experience.

Is Klarna Safe?

With over 23 million monthly users worldwide, Klarna is a safe buy now, pay later platform. 

The Better Business Bureau (BBB) also gives Klarna an A+ rating. So you can have peace of mind knowing there are no unfair business practices going on.

Regarding data safety, Klarna’s privacy policy says they may share your personal data with other companies for marketing purposes. This data includes your location, email address, and device ID.

But according to the GDPR (General Data Protection Regulation), companies must delete all your data if you request. So if you’re uncomfortable with Klarna collecting your data, contact their customer support team to delete it.

Klarna Reviews

Here are some recent Klarna reviews from customers:

Positive Klarna review shows how confident users feel with the purchasing power of Klarna to back them Source: Trustpilot

5-star Trustpilot Klarna reviews mention how you don’t have to save for weeks before making a purchase Source: Trustpilot

I found that most of the bad Klarna reviews talk about poor customer support and decreases in spending limits, so that’s something you’ll want to consider before signing up.

Commonly Asked Questions About Klarna

Klarna Vs Affirm

Klarna and Affirm are both buy now, pay later (BNPL) apps, but Affirm charges zero late fees. Affirm also allows you to make purchases worth up to $17,500, while Klarna’s limit is $10,000. So, Affirm gives you access to more credit and no late fees. However, Klarna is available at more stores. 

Can Klarna Be Trusted?

Klarna is a trustworthy buy now, pay later (BNPL) app because it has an A+ rating from the Better Business Bureau (BBB). Klarna also has over a 4-star rating on Trustpilot and responds to both positive and negative Klarna reviews.

Is Klarna Bad For Your Credit?

Klarna doesn’t affect your credit score, but other lenders can see your Klarna on-time payment history or unpaid balances. So, Klarna can help you qualify for larger loans in the future if you’re a responsible consumer.

How Does Klarna Work?

Klarna allows you to shop on credit and pay back your loan interest-free. They offer loan options for 30 days, six weeks, and even up to 24 months. To start using Klarna, sign up for an account, and once you’re approved, buy products, and pay your installments on time.

Is There A Downside of Klarna?

Klarna makes your total look smaller upon checkout, encouraging you to buy more products. These psychological tricks can leave you in mountains of debt if you aren’t aware of them. So I suggest using Klarna occasionally and avoiding it entirely if you have a history of poor spending habits.

Is Klarna A Good Way To Build Credit?

Klarna can help you build a good credit history. Although it won’t boost your credit score, future lenders can view your payment history. And if your payments are always on time or early, it’ll show that you’re a responsible consumer. 

Does Klarna Affect Credit?

Klarna doesn’t report your payments to a credit bureau, so it’s an impractical option if you’re looking to boost your credit score. 

What Credit Score Do You Need For Klarna?

Klarna doesn’t have a minimum credit score requirement, so you can get approved without a credit history. If you apply for the ​​four interest-free installment payments, Klarna will conduct a soft credit check, but they aren’t looking for a specific credit score; they just want to approve your account.

Is Klarna Better Than Afterpay?

Klarna is a more flexible buy now, pay later (BNPL) app than Afterpay because it offers more payment plan options. With Klarna, you can pay in 4, pay in 30, or choose loans for up to 24 months. This makes Klarna a plan that can be tailored to your financial situation.

What Are Klarna Alternatives?

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