hi there ‘Monica. Very good question and thank you for asking it. I think a lot of people are unsure about these companies.
I haven’t personally used these companies but I am reasonably well acquainted with Klarna. As a point of sale lender they seem to be pretty transparent and fairly reasonable in their dealings with people. I have to say, it’s not the sort of service I would want to use unless I really really needed something and didn’t have the money. But then I feel like that about using credit cards. As you know, if you buy something with a credit card and you can’t pay off the debt before the interest kicks in, that thing is going to cost more than the original price-tag because you have to pay the interest as well!
I asked my friend Angela Clemments, founder of Fair For You, a charity-backed loans company that deals with customers fairly, to see what she thinks. This is what she said:
“I would always use a credit card because you have the insurance in it. If you are buying on line and you have a credit card, then we would always recommend using that as it gives you additional protection if you have any problem with the retailer or the items being sold to you. & with so many retailers experiencing trading issues, its well worth having a credit card to use for on line purchases.
Klarna are a global finance company, based in Sweden, & really popular in the UK for point of sale credit. It is a well known brand, and entirely reputable. It is indeed interest free so long as you pay on time. Its very popular with a lot of people who don’t have credit cards, because it is a flexible and cheap way to spread your purchase. There have been stories in the press about customers that pay late getting caught out with unexpected fees which are not very prominent on their website and so it is worth reading the detail of the terms and conditions, as you will pay interest and late fees if you miss your payment and can’t pay on time.: