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Credit cards have some brakes because they only extend credit to people they think will pay it back. Klarna’s marketing pitch is “no credit check”. They then j

Credit cards have some brakes because they only extend credit to people they think will pay it back. Klarna’s marketing pitch is “no credit check”. They then just send an automated ACH to your bank account. If the funds aren’t there they send it over and over, hoping to punish you with returned-payment fees or overdraft fees. It’s quite different than a credit card and significantly more predatory. (Particularly pernicious is their claim if they do run a credit check it’s only a “soft pull”… what they are doing should be a hard pull and create a new trade line for an installment loan, albeit a bizarre 4 payment 4 week term one. Creditors are legally obligated to report accurate information. Klarna is conspiring not to do so.)

gruez 2y ago
>Credit cards have some brakes because they only extend credit to people they think will pay it back. >Klarna’s marketing pitch is “no credit check”. No they're not. If you check the fine print you'll see something along the lines of "subject to approval". They're not giving out free money to anyone who fills out a form.
- trollbridge 2y ago
  It’s crazier than that. It might be a soft pull or might not be. Whether or not they say it will be a credit check depends on who you are, presumably based on how likely their algorithm thinks you are to turn them down. I ran into this recently helping someone with their finances who forgot about random Klarna purchases… I worked off of their credit report, and Klarna was just on there at all. (Obviously lesson #1 was “don’t do Klarna and stuff like it, even though it’s zero interest”).
aaronbaugher 2y ago
That's what I wonder/worry about with all the various cash/finance apps. I'm no fan of the banks and credit card companies, but at least they're wrapped in regulations that are commonly known and understood. With Joe's Fast Money app, who knows what's backing it or whether there are any rules governing what they can do to you.

gruez 2y ago

>Credit cards have some brakes because they only extend credit to people they think will pay it back. >Klarna’s marketing pitch is “no credit check”. No they're not. If you check the fine print you'll see something along the lines of "subject to approval". They're not giving out free money to anyone who fills out a form.

trollbridge 2y ago
It’s crazier than that. It might be a soft pull or might not be. Whether or not they say it will be a credit check depends on who you are, presumably based on how likely their algorithm thinks you are to turn them down. I ran into this recently helping someone with their finances who forgot about random Klarna purchases… I worked off of their credit report, and Klarna was just on there at all. (Obviously lesson #1 was “don’t do Klarna and stuff like it, even though it’s zero interest”).

aaronbaugher 2y ago

That's what I wonder/worry about with all the various cash/finance apps. I'm no fan of the banks and credit card companies, but at least they're wrapped in regulations that are commonly known and understood. With Joe's Fast Money app, who knows what's backing it or whether there are any rules governing what they can do to you.