What is Klarna and how does it let you 'buy now, pay later' with no interest?

Multiple retailers have started offering flexible financing and monthly installment payment plans through third-party 'buy now, pay later' apps such as Klarna, Affirm, Afterpay, and even PayPay has its own solution called Pay in 4. In this guide, Pocket-lint is specifically covering how Klarna works, which sites and stores accept it, what you can buy with it (like AirPods or Apple Watches), and whether it has any credit requirements, hidden fees, and interest.

What is Klarna?

Klarna is a 'buy now, pay later' service (or a point-of-sale financing service) founded in Sweden in 2005. It's available in nearly 20 countries and used by approximately 90 million shoppers. With Klarna, you can secure small loans at checkout for both online and in-store purchases through the Klarna mobile app. It works with popular retailers, such as Apple, Macy’s, Etsy, Foot Locker, and Sephora, allowing you to make affordable payments on big-ticket items.

How does Klarna work and is a credit check required?

First, download the Klarna app from the Apple App Store or Google Play Store.

How to get started

1. Open the latest version of the Klarna app. You will see the option to create an account.
2. Select 'create account' and enter your email address.
   • You will be asked to verify your identity with a code sent to your email.
3. Klarna will then ask for a phone number to connect to your account.
   • Again, it will send you a code to verify your identity.
4. Klarna will then ask for your permission to track you. You can deny it.
5. You will be directed to a page to find stores that accept in-store Klarna payments.
6. Tap the back button to get to the Home screen and start exploring the Klarna app.

How to navigate the Klarna app

1. When you open the Klarna app, you will land on the Klarna home screen.
2. From the home screen, you will see several buttons to different pages:
   • Shop online
   • In-store
   • One-time cards
   • Payments
   • Purchases
   • Deliveries
   • Everything saved
   • Deals
   • Rewards
   • My Store
   • History
   • Invite Friends
   • Inbox
   • And More, which leads to CO2 emissions, Help, and Settings
3. A search bar is at the top and a navigation bar is at the bottom of the home screen.
4. The navigation bar has tabs for Home, Saved, and My Klarna.

How to shop online with the Klarna app

1. From the home screen, tap Shop online option.
2. Search a retailer you'd like to buy from online, such as Amazon or Walmart.
   
   • You may be asked to sign in to your account at the retailer.
3. When you have all the items you want to buy in your cart, press the pink Klarna button.
4. Klarna will then create a secure one-time card.
   • Approve the amount and other details like shipping and taxes. Hit continue.
   • Klarna may perform a soft credit check that doesn't affect your credit score.
   • Klarna will also ask your permission to add extra to cover shipping and tax.
5. Enter your details for Klarna, like name, birth date, and address.
   • Agree to terms and hit confirm and continue.
6. You will also need to select the payment plan you prefer. For instance, you may see:
   • 4 payments every two weeks at 0% APR
   • 6 monthly payments with interest.
7. Once you pick a plan and hit continue, add your bank or credit card info for Klarna.
   • Save your card info, review your plan, and hit confirm and continue.
8. Klarna will then let you copy the details of your Klarna one-time card.
   • When done, exit out of the pop-up in the Klarna app to go back to the retailer.
   • Keep in mind all the steps you're performing are done directly in the Klarna app.
9. From the retailer's checkout screen in the Klarna app, add a new payment method.
10. Klarna will then offer to paste/apply your one-time card info, or you can do it manually.
11. Whichever you choose, add the card, choose your billing address, and place the order.
12. That's it!

How to shop in-store with Klarna

1. From the home screen in Klarna, tap the In-store option.
   • Keep in mind all the steps you will perform are done directly in the Klarna app.
2. You will be asked to set up your in-store card.
   • This is a one-time process that requires a valid debit or credit card.
   • Your card needs at least 25% of the total amount you're hoping to spend.
   • Amex and prepaid cards are not accepted.
   • Once set up is complete, your in-store card will be available in Apple Wallet.
   • You can then shop at any terminal that accepts Apple Pay.
3. Hit the Yes, I'm ready to start button.
4. Enter the amount you wish to spend and then continue.
   • Klarna may perform a soft credit check that doesn't affect your credit score.
   • Klarna will also ask your permission to add extra to cover shipping and tax.
5. Klarna will offer its "Pay in 4" payment plan option with a link to see more details.
   • You may be asked to enter your bank or credit card info for Klarna.
   • If you already have, then just review your plan and hit confirm and continue.
6. Klarna will create your in-store card and let you add it to your Apple Wallet.
   • Hit Next and agree to terms.
7. Klarna will show you how to use Apple Pay and it will tell you how long the card is valid.
   • Most cards are only valid for 24 hours.

What are the differences between Klarna's US payment plans?

Klarna offers four payment options, but the thousands of retailers that offer Klarna financing have the discretion to decide which can be available to their customers. Here's a handy chart that breaks down the differences between each US plan, including the terms, amount due at checkout, interest, and late fees.

Payment plans	Terms	Due at checkout	Interest	Late fee
Pay in 4	Pay four equal installments - due every two weeks. See legal terms.	Your first installment is due. It's the balance divided by four.	No interest.	Up to $7
Pay in 30	Pay nothing for 30 days, and then pay the full balance. See legal terms.	$0	No interest.	No late fee. But if you don’t make the full payment, you might go into default.
Financing	Pay with a small loan ranging from 6 months to 36 months. See legal terms.	$0	0% to 29.99%; 19.99% for standard purchases.	Up to $35
Pay Now	Pay with your debit or credit card through the Klarna app. See legal terms.	Full balance. This option is ideal when you have extra funds and want to close out your loan.	No interest.	Not applicable.

Does Klarna require a minimum credit score?

Klarna is often easier to qualify for than a credit card because although it performs a soft credit check, there’s no minimum credit score required.

Does Klarna automatically bill you?

Yes, which is perfect if you have a hard time keeping track of your balance or bills. When you choose a plan, Klarna automatically bills your debit or credit card.

What are the pros and cons to Klarna?

Here's a quick breakdown of the pros and cons to consider:

Pros	Cons
No-interest financing options. Easy-to-use app, where even checkout is done inside. Works with thousands of retails.	Runs a soft credit check (doesn't affect your credit score). Doesn’t report on-time payments to the credit bureaus. In-store, one-time cards usually expire within 24 hours.

Which stores accept Klarna?

Physical stores

Klarna is available to use in-store at more than 60,000 shops, like Sephora, H&M, Macy’s, and more. Go here to see all the stores that offer Klarna financing.

Online stores

Klarna is available at just as many, if not more, online retailers, like Amazon, Walmart, and Apple. Go here to see all the stores that offer Klarna financing.

Are there alternatives to Klarna?

There sure are - such as Affirm, Afterpay, and PayPay Pay in 4.

Is Klarna right for you?

Klarna can help you purchase something you want but can’t pay for upfront. For instance, you can use it at Apple, Best Buy, and other stores that sell the latest tech and electronics. Want an iPad Pro? No problem. Its Pay in 4 or Pay in 30 plans are likely your best bet, too, as they don't charge interest.

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