BUY-now, pay-later app Klarna promises to delay the cost of shopping online so you can buy things that you need without waiting for pay day.
At times when our wallets are taking a hammering, it could be useful – but like most credit options, it should be used with caution.
Here's what we know about the app:
What is Klarna and how does it work?
Klarna is an app you can use to makes purchases without payment online at selected stores – you then pay for the goods later.
Your item will ship to you straight away and an email will be sent to you indicating when the payment is due.
You'll have 14-30 days (depending on the store) to decide whether you want to keep the item before being required to pay.
When payment is due, you log in to your account and use a debit card to settle your balance.
It has the benefit of allowing you to purchase things online and decide whether you want to keep them or not before you actually pay for them.
That means if you decide you don't want your item, you aren't left waiting for the refund to appear in your bank account.
There is also the option to spread payments over several months, or even years.
Unlike some credit cards, Klarna doesn't charge interest or fees on the period between purchasing your goods and paying.
Does Klarna affect my credit score?
Klarna users have to be approved using a soft background credit check, which does not impact your credit rating, even if you are denied.
But if you choose to repay over several months – something known as "slice it" on the app – a full background credit check will be needed for this feature and if you are rejected, this could affect your credit score – something worth noting before applying.
If you fail to pay your bills on time, your credit score could also be affected.
What happens if my Klarna repayment is late?
Klarna alerts you that you need to make a payment two days before it is due.
If your repayment is late, you will not be charged interest or penalties in the UK, but it may affect your credit score.
The company will automatically attempt to collect payment from the card that you entered at checkout.
If the automatic payment fails, it will try again after seven days, and then again after a further seven days if it fails again.
Klarna also has a team of staff who you can talk to about repayments if you're getting behind.
The company has also said that accounts are passed to debt collection agencies if unpaid after several months.
What shops are signed up to it?
A variety of retailers are signed up to Klarna, including H&M, Topshop, ASOS, Made.com, Gymshark, Schuh, River Island, Space NK, Halford, Expedia and more.
A full list of shops which over the payment option can be found here.
Once you know a store offers Klarna you can select it as the way you wish to pay at the checkout stage.
Source: Read Full Article