Klarna Review: Too Good To Be True?

In this Klarna review, we’ll be covering the good, the bad and the downright ugly when it comes to ‘buy now pay later’ schemes such as this trendy platform. 

Other buy now pay later companies include Laybuy and Clearpay.

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What is Klarna?

Klarna is the latest buy now pay later platform, which promotes itself as an all-in-one shopping app allowing you to shop anywhere and pay in 3 instalments. 

Having developed its own app, Klarna makes online shopping easy and accessible. Featuring daily inspiration, payment schemes, notifications when your saved items drop in price and the ability to manage/pause payments. All this is at your fingertips when you go to checkout from your favourite retailer.

Working together with big brands, such as Gymshark, Boohoo and ASOS (to name a few of many) and creating memorable ads featuring Snoop Dogg, Klarna has nailed their millennial market.

How does Klarna work?

Here’s a Klarna payments review:

Option 1 – Pay in 3. 

Spread the cost over three interest-free payments. The initial payment is made on the day of purchase, followed by the remaining two instalments that are automatically scheduled every 30 days.

Option 2 – Pay in 30 days.

Order now and pay in 30 days for those items that you keep. The payment period starts once the items have been shipped. You can schedule to make the payment any time up to 30 days. Essentially, bringing the changing rooms to your house and trying on the goods in the comfort of your home!

Option 3 – Financing.

A credit option that allows you to spread the costs over 6-36 months. This option incurs an annual interest rate and involves a credit check that could impact your credit score. 

There is also an option to pay now and simply use your card information stored on Klarna to complete a purchase. 

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Before financially committing to a payment scheme, always review the terms and conditions.

We also have a guide to the advantages and disadvantages of payday loans here.

Is Klarna legit?

Klarna is a Swedish financial tech company with over 90 million active consumers. 

Having been criticised for promoting buy no pay later to consumers that would find themselves in debt, the UK Government announced in February 2021 that the sector would be subject to regulation from the UK’s Financial Conduct Authority.

Klarna is a legit financial platform that can help you purchase big-ticket, or potentially smaller items, that you need but are unable to cover upfront. But you must be confident that you can afford subsequent payments.

How does Klarna make money?

As Klarna doesn’t charge interest fees and user fees, you may be wondering how they make money as a business.

Klarna sets up transaction fees for the retailers that use their service. 

Why would retailers offer Klarnas service to customers if they get charged for it? 

Klarna believes it can improve shopping experiences, introduces your brand to its 10 million UK users, and has a clever way of increasing orders and spends.

Does Klarna affect credit?

For the majority of its payment schemes, Klarna transactions won’t feature on your credit file. However, its long term financing option and any repeated missed or late repayments will feature on your credit file and impact your credit score. 

Klarna claims they don’t affect your credit score, but if you read the information available on retailers stores, you will find the small print states that your credit score will be impacted if you make a late payment to Klarna.

There have been occasions where late payments have been escalated to debt collection agencies being informed. This would most certainly go on your credit file. 

Klarna review credit score

Can you be declined for Klarna?


Klarna claims that it does not approve 100% of all applications in a movement to support responsible spending habits. Instead, you can increase your eligibility by increasing your length of time as a Klarna customer, having a good repayment history, or requesting a lower sum to be covered under the buy now pay later scheme.

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However, one rejection does not mean that all your future purchases will be declined, and approval is not solely based on credit score but other data points.

Is Klarna a safe payment method?

Klarna is known for being safe. Customers no longer have to provide their details to an array of online retailers and can instead have access via one app, and it charges no hidden fees. 

However, Klarna is ultimately a third party when it comes to making payments and therefore, users forfeit their Credit Act protection. Meaning, even if you were to use your credit card to purchase over £100+, you would not be protected if the item turned out to be faulty, lost in transit, or the retailer goes bankrupt.

Real experiences and reviews can be read on Trustpilot: the good bits and Klarna complaints.

Here’s something to be aware of: when signing up for Klarna’s service, you only undergo a soft credit check. Therefore, their sign-up process can quickly be done with someone else’s name and very basic contact details leading to fraud. 

Can you get scammed on Klarna?

I certainly did. And I am not the only one who has experienced this.

Fraudsters had managed to set up an account using my name and an old email address, resulting in over £300 of debt in my name. Unfortunately, due to the lack of information needed to set up a Klarna account, I had unknowingly found myself in debt due to identity theft. 

How did I find out? An unexpected parcel arrived on my doorstep, and after some digging, I traced it back to Klarna. Having reported it to the UK’s national fraud and reporting centre (Action Fraud), Klarna quickly closed the account. 

Report fraud attempt to Klarna here.

Should I use Klarna?

We’ve summarised our thoughts below – it is for you to decide. Klarna could work for you!

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Here are the good bits:

  • No annual fee to use Klarna
  • Range of zero-interest payment plans
  • Automatic payments
  • Easy-to-use app
  • Direct access to lower prices
  • Payment reminders
  • Refunds
  • Vast variety of retailers
  • Allows you to purchase many sizes to try without paying upfront and only pay for what you keep
  • Easy checkout experience
  • Enables you to afford items and spread the cost over time that you may have been unable to afford upfront

Here are the bad bits:

  • Easy to get into debt by spending more than you can afford
  • The use of Klarna does not encourage budgeting. Try out our no spend challenge if you want to better your spending habits.
  • Influencers promote buy no pay later platforms such as Klarna without disclosing the risk of using them, lack of transparency when it comes to affecting your credit score.
  • Tendency to spend more when able to repay in instalments
  • Glorifying credit, rather than the ability to pay in full
  • In an age of online fraud, there should be more barriers in place to prevent acts of fraud
  • Mixed reviews when it comes to Klarna contacting you when you’ve missed a payment. Some claim their first contact is when debt collectors show up. 

The best way to use any sort of credit is to pay it off in full when possible. 

If you want to read more on future changes to Klarna, @go_fund_yourself is run by Alice Tapper, who successfully campaigned for buy no pay later schemes to be regulated by the Financial Conduct Authority. 

When used correctly, Klarna can help you spread out your costs and offers you great discounts. But, be cautious and take care not to spend beyond your limit.

Have you ever used buy no pay later scheme? How was your experience?


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