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It lets you spread the cost of things over several no-interest payments. It also offers a 'buy now pay in 30 days' facility. Again zero charge. Very useful if y

It lets you spread the cost of things over several no-interest payments. It also offers a 'buy now pay in 30 days' facility. Again zero charge. Very useful if you're buying some clothes, some of which you might return quickly. In countries where people don't want, or need, credit cards it's a very useful alternative.

dewey 3y ago
The main criticism is usually that it makes it very easy to get into debt. If you spread out non-essential purchases into multiple payments to shoulder them then you maybe shouldn't buy it in the first place.
- brookst 3y ago
  Is it any worse than credit cards?
  - kzrdude 3y ago
    Klarna made credit available (on almost any online item) to lots of swedes who didn't have credit cards.
- basisword 3y ago
  >> If you spread out non-essential purchases into multiple payments to shoulder them then you maybe shouldn't buy it in the first place. There's nothing wrong with managing your cash flow in this way provided you're not stretching yourself to the point where getting into debt is a possibility. There are plenty of expensive things I could buy now where I would rather spread the payment over a few months for better cash flow. Klarna is, in my opinion, very different from payday loan services. Payday loans are offering cash at very high interest rates, and the only people who need cash that badly are people struggling to pay rent/pay for some emergency. That's very predatory. Klarna is very different. Sure you could get into debt through it if your reckless, but it's much less predatory.
  - agsnu 3y ago
    Surely Klarna’s model relies on some portion of folks being charged late fees? Seems only marginally less predatory…
    - basisword 3y ago
      I mean that's just how credit works right? Either you pay a certain amount of interest or there are late fees. Payday loans you typically pay back the sum + a large (10+%) amount of interest even when borrowing for as little as one week and paying back on time. Hugely more predatory. They're seeking out people who need cash and have no other option.
    - pseudo0 3y ago
      Typically BNPL companies like Klarna take a cut from the merchant as well. The idea is to increase volume for the merchant through psychological trickery, resulting in a net increase in profit even after the BNPL company's cut.
- mokash 3y ago
  paying up front when offered an interest free loan, especially in a high interest rate environment is not really rational though. i have excellent credit but klarna doesn't offer its services to me, i suspect because they expect i will make the payments on time and become unprofitable.
  - granzymes 3y ago
    I suspect that whatever transaction Klarna did not offer its services to you during was an outlier. Klarna is paid by the merchant when you select them as a payment method. They definitely want people with excellent credit, because people with excellent credit are low-risk.

dewey 3y ago

The main criticism is usually that it makes it very easy to get into debt. If you spread out non-essential purchases into multiple payments to shoulder them then you maybe shouldn't buy it in the first place.

brookst 3y ago
Is it any worse than credit cards?
- kzrdude 3y ago
  Klarna made credit available (on almost any online item) to lots of swedes who didn't have credit cards.
basisword 3y ago
>> If you spread out non-essential purchases into multiple payments to shoulder them then you maybe shouldn't buy it in the first place. There's nothing wrong with managing your cash flow in this way provided you're not stretching yourself to the point where getting into debt is a possibility. There are plenty of expensive things I could buy now where I would rather spread the payment over a few months for better cash flow. Klarna is, in my opinion, very different from payday loan services. Payday loans are offering cash at very high interest rates, and the only people who need cash that badly are people struggling to pay rent/pay for some emergency. That's very predatory. Klarna is very different. Sure you could get into debt through it if your reckless, but it's much less predatory.
- agsnu 3y ago
  Surely Klarna’s model relies on some portion of folks being charged late fees? Seems only marginally less predatory…
  - basisword 3y ago
    I mean that's just how credit works right? Either you pay a certain amount of interest or there are late fees. Payday loans you typically pay back the sum + a large (10+%) amount of interest even when borrowing for as little as one week and paying back on time. Hugely more predatory. They're seeking out people who need cash and have no other option.
  - pseudo0 3y ago
    Typically BNPL companies like Klarna take a cut from the merchant as well. The idea is to increase volume for the merchant through psychological trickery, resulting in a net increase in profit even after the BNPL company's cut.
mokash 3y ago
paying up front when offered an interest free loan, especially in a high interest rate environment is not really rational though. i have excellent credit but klarna doesn't offer its services to me, i suspect because they expect i will make the payments on time and become unprofitable.
- granzymes 3y ago
  I suspect that whatever transaction Klarna did not offer its services to you during was an outlier. Klarna is paid by the merchant when you select them as a payment method. They definitely want people with excellent credit, because people with excellent credit are low-risk.