Have you heard of Klarna?

Klarna is a new lender that is making a name for itself in America. If you dig a little deeper, you find that Klarna is not new at all. It is one of the biggest consumer lenders in Europe. It has been in the United States for a relatively short time (mid 2015), and it offers some great alternatives for folks who don’t have a pocket full of credit cards with low balances on them.

Sound interesting? Yeah, we thought so.

Klarna really is different. But, before we get to that, get this. Klarna has processed millions and millions of transactions from 65,000 merchants in 18 countries. This isn’t some unheard of lender working out of a basement in New Jersey. It has been reported that Klarna moves over 400,00 transactions per day. Visa recently purchased a share of Klarna. 

That should tell you what you need to know about whether the company is legit. Klarna is very much a real lender.

Now that you know that, figure out how this can help you and your friends. Here’s what we understand about how it works. 

  • Klarna is not a credit card company, but it is a third party lender.
  • Third party lender means Klarna is not “store credit.” It’s better, and the terms are more reasonable than typical store credit offers.
  • Klarna works like a digital credit card company, but only at places that accept Klarna credit payments. This number is still pretty small in the USA, but it is growing quickly. Lenovo is one of the better known companies that accept. Ghost Bed is another. These may not be important to many of our readers. 
  • There is a new company, Easy Plum, that will probably interest a LOT of folks recovering from bankruptcy and other financial disasters. Easy Plum is an online department store, but we’ll get to their story in another post.

Getting back to Klarna: it works like this-

  • You go shop where Klarna is accepted. When you get ready to check out, there will be a place to choose Klarna for monthly payments.
  • You do a really simple application. It takes only a few seconds to get approved. You do not need perfect credit. (They won’t accept awful, awful credit history, but they do offer credit to people who have credit blemishes. They aren’t saying how they do it, but they have technology that can find out if you are “real” and have income and have mostly paid your bills.)
  • Once you are approved you will be given information about your Klarna credit account, and you may also get some choices about how the monthly payment plan. You may get to decide how many months you want to repay.

After you have a credit account, you don’t have to apply every time you want to purchase a new item. Let’s say you buy a laptop at Lenovo. Later, you want to buy a docking station, carry bag, and extra screen. It’s easy enough. Return to Lenovo, pick out the products, and go to checkout. Choose the Klarna pay option, and quick as a blink you find out how much your new monthly payment will be.

We looked for reviews online. Most were good. The biggest problem we saw was about the digital account. Klarna communicates with you via email. You must use an account you work in on a regular basis. If not, you are likely to forget about billing statements and payments and all the important stuff. If you are late, you will be charged a late fee. (Hello, were you thinking they would just ignore it!) The biggest complaints we found were consumers who blamed Klarna. Yep, the customer is late, but it’s Klarna’s fault because, wait for it, email!

Enough snark. We will be posting more about Klarna. Here are some FAQs. We think it’s a pretty cool company. Makes you wonder why American companies can’t be innovative this way.