That’s why you decided to use Klarna in the first place. When you’re shopping with a buy now, pay later company, chances are, you’re not worried about how you’re going to pay the full amount for something. Is it safe for your wallet? Eh, not so much. If you’re online shopping at one of these stores and then head to your shopping cart, Klarna’s Pay in 4 option is right there waiting for you. Here’s the scary thing: You don’t even need to download the Klarna app or go to their website to use their services. That means you can use their payment options to get everything from fashion and electronics to beauty and home goods. stores like Macy’s, H&M, Nike and Sephora. Klarna partners with over 250,000 different shops all over the world, including popular U.S. At that point, you’ve just about added a fifth payment when you could’ve just budgeted, saved up $100, and paid for the shirt all at once! If you’re late on three of those four payments for that $100 shirt, it’s now a $121 shirt. 3 I know, I know-$7 doesn’t seem like the end of the world. If your card declines on your second, third or fourth Klarna payment, they’ll tack on a fee of up to $7 for each missed payment. And while that option doesn’t collect any interest, it can collect late fees-I know y’all are smart enough to see this one coming. Pay off debt fast and save more money with Financial Peace University.īut Klarna’s Pay in 4 option is definitely the most popular-that’s the one you see all the store websites using. That’s an extra $171 you could’ve had in your pocket! If you choose to take 24 months to pay for a $500 coat, you’d only have to pay about $28 a month, but you could end up paying about $671 for that coat after two years. 01% away from being 30%, you guys! (I’m really good at math.) Option three is Klarna’s only payment option that comes with interest-and the APR (annual percentage rate) can be as high as 29.99%! 2 Dang, that’s just. But option three is by far the most dangerous, so we’re going to talk about that one first. Honestly, I don’t like any of those options. Option 3: 6–24 Month Financing. Klarna partnered with WebBank for this “flexible financing” option that allows you to split up your bill in monthly payments for six months or up to two years.Option 2: Pay in 30 Days. Get your stuff right away and have 30 days to pay up.Option 1: Pay in 4. Split the cost of your purchase into four interest-free payments with 25% down and the rest paid every two weeks.Here’s a breakdown of what they offer for buy now, pay later: If you download their app, you can shop at their partner stores-online or even in person-and check out using the Klarna app to choose from one of their payment options. Klarna offers a few different options for users. And you know how I feel about those! Stay far, far away-just like your mom told you to stay away from strangers on the playground. You know what that sounds like? A credit card. Klarna claims to offer “shopping freedom” to its users with “flexible payments, full transparency, and free rewards.” I don’t know about you guys, but getting roped into monthly payments does not sound like freedom to me. Here’s a quick history lesson so we know who we’re dealing with: Klarna started in 2005 in Stockholm, Sweden, but its parent company-The Klarna Group-didn’t form until 2014. It’s just one of several installment payment plans (like Afterpay and Affirm) you’ve probably seen while shopping online, tempting you to buy things you can’t afford right now by giving you extra time to pay for it. But they’re mostly known for their app that lets you buy something now and pay for it over time. So, allow me to be your actual friend and explain how these kinds of services work hard to take as much of your paycheck as possible. Klarna is not your friend, and it’s definitely not going to help you get rich. Step away from that Buy Now button real quick and hear me out on this: Buying now and paying later is a good way to be broke now and later. Just because those split-up payments are interest-free doesn’t mean they’re a smart move. You only have $30 left in your clothing budget, so you know you have to say ta-ta for now to those blue beauties.īut wait-what’s that? Right underneath that Buy Now button, it says something like “Pay in 4 interest-free payments of $30 with Klarna.” And you’re thinking, Heck yes! I’ve got $30 in my budget, and I’ll just roll those other three payments into next month’s budget, and the one after that, and the one after that. You tap the link, and your heart skips a beat-$120 for a pair of jeans? They’re marketed as “the last pair of jeans you’ll ever buy.” Dang. Guys, we’ve all been there: You’re scrolling through social media when you get hit with an ad for some jeans that you just have to have.
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