What Is Klarna and How Do You Use It?

New York, USA - Aug 8, 2019: Klarna is an emerging buy now pay later service provider.
Ross Tomei / Getty Images

Buy now, pay later services are gaining in popularity. According to a recent survey, 37% of U.S.-based respondents said they’ve used BNPL technology. That’s where Klarna comes in. But what is Klarna and how does the platform work? 

What Is Klarna?

Klarna is self-described as “the global leader in the generational shift away from credit cards.” At its core, the platform is a BNPL service that makes it easy to buy things you want today, even if you don’t have all the cash available for the purchase. The company has partnered with over 500,000 retailers around the world to offer products on a simple payment plan. 

With Klarna, you can either:

  • Pay in 4: Pay 25% of the total value at the time of the purchase. Then pay the rest in three installments every two weeks for a total of four equal payments. 
  • Pay in 30 days: Pay the total value of your purchase up to 30 days later. 

If these BNPL options don’t work for you, you can sign up for the Klarna credit card. You can also take advantage of monthly financing through Klarna’s partner bank, WebBank, for up to 48 months.  

Make Your Money Work for You

If you want to pay in full at the time of purchase, you can use Klarna’s Pay Now service. This option is interest free and comes with no fees.

How Does Klarna Work?

You can start by shopping Klarna’s partner brands but you aren’t limited to just those. By using the Klarna app and browser extension, you can shop brands that do not accept Klarna.

Once you find a product you like, follow the general steps to make the purchase. However, when it’s time to make your payment, choose to pay with Klarna. From there, you can decide whether you’d like to use Pay in 4 or Pay in 30 Days.

Once you’ve made the purchase, payments happen automatically. This means Klarna will automatically deduct the agreed-upon amount from your payment account on the due date until you’ve paid for the entire purchase.   

What Are the Pros and Cons of Klarna?

Although Klarna seems like a simple way to get your hands on products you want but simply can’t afford right now, in actuality it is a financial service. You should carefully consider the pros and cons before you sign up for any financial service, including a BNPL service like Klarna. 

Make Your Money Work for You


Klarna has grown to be a massive company for several good reasons. Some of the factors that keep customers coming back for more include:

  • Payment plan: Access the items you want with an easy-to-understand payment plan.
  • No fees: Klarna doesn’t charge any fees or interest when you choose to pay in four equal payments every two weeks or pay your balance off completely within 30 days.
  • Number of brands: Shop with over 500,000 retailers that accept Klarna as a form of payment.
  • Other payment options: If you’re not interested in four equal payments or the ability to pay over 30 days, the company’s other lending options may interest you. Klarna also offers the Klarna card, a credit card fulfilled by WebBank.     


Although Klarna may seem like the perfect option for short-term credit, there are a few reasons you may want to stay away from the service. These include:

  • Debt: BNPL services may cause some consumers to spend more money than they can afford to pay back. Before making your purchase, you should consider all the options Klarna offers. Make sure you factor your potential monthly payments into your budget.
  • Fees: Klarna doesn’t charge any fees for its short-term payment products. However, if you sign up for the Klarna credit card, you’ll have to pay a $4.99 monthly fee to access interest-free short-term payment plans. 
Make Your Money Work for You

How Much Can You Spend With Klarna?

Klarna doesn’t have a predetermined spending limit it imposes on all borrowers. Instead, the company understands that all borrowers are unique, and the company provides everyone with their own spending limit. If you’d like to know how much you can spend, follow these steps:

  1. Log in to the Klarna app. 
  2. Tap “Purchase Power.” Your purchase power is your Klarna credit limit.
  3. Follow the prompts on the screen until the app shows your current purchase power.

Final Take

If you’re interested in purchasing a product at a Klarna partner company but it is outside of your immediate budget, consider using Klarna’s BNPL services. However, make sure you are carefully considering the pros and cons before signing up for any financial service, including Klarna. 


Here are the answers to some of the most frequently asked questions regarding Klarna.
  • What is the downside of Klarna?
    • Some consumers might not factor in the cost of using Klarna into their budget. Having the ability to easily spread the cost of goods over four payments could lead to consumers spending more money than they can comfortably afford to pay back.
  • Is it a good idea to use Klarna?
    • If you're able to use the app responsibly and can think about the long-term impact of the purchases you're making, Klarna can be a valuable tool.
  • How does Klarna impact credit scores?
    • If you use Klarna, it will not have an impact on your credit score.
Make Your Money Work for You

Information is accurate as of July 28, 2023. 

This article has been updated to correct inaccurate reporting.

Editorial Note: This content is not provided by any entity covered in this article. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by any entity named in this article.

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