Klarna - good or bad thing?

[kadykal95]

I read an article about a young girl who got into thousands of pounds of debt using Klarna to buy clothes and accessories she could not afford. That kind of debt against her name will affect her whole credit life from a mortgage to car finance etc..
I can see in todays world how it would be so tempting for people to do this...

Shopping using buy-now-pay-later app Klarna left me £1,500 in debt and homeless

HER finger hovering over the “add to basket” button, Tabby Smith hesitated. Cash-strapped admin assistant Tabby, 24, could not afford the £60 Asos dress. But with buy-now-pay-later app Klarna, she …

www.thesun.co.uk

I admit to using Klarna occasionally, mostly because i like to order more than one size of the same item to see which one fits better, I also like the feeling of only physically paying for what I know 100% i am keeping and that money isn't going out of my account. It sounds silly looking at it that way as if i paid for the items i could always return and get a refund, but that takes time.

I always pay it off straight away and would NEVER use it to buy something i couldn't afford i.e that i don't have the money for right now.

Thoughts?

 

[Instafamous1]

I always use it cos like you said it’s nice to be able to try things on without having to wait for ages for the money to come back if you return it.

There is definitely a risk of forgetting how much you have ordered on there and then not being able to pay it when 30 days are up. I do think klarna though one of the more responsible ones as there has been occasions when I’ve had too much outstanding (that I planned to send back) and it wouldn’t let me order anymore.
Plus they give you options of ‘snoozing’ purchases for 10 days without penalty which might give you chance say you weren’t due to get paid until after the payment due date.

 

[Platypusfattypus]

I use klarna. I used it to buy the kids school shoes, I make sure that I only take out what I can pay back and find it easy to use.

 

[chocolate choux]

I think it’s no different to any other credit card/buy now pay later scheme. Know the terms and conditions, pay it off on time and limit your spending to what you can afford and it’s a good thing

I don’t use it or anything like it - I try not to shop much and when I do have to return something, I’m not desperate to get the money back immediately (too anxious not to have a decent cushion in my bank account). Might have to use credit in the future to bump up my score but I’d be very careful

 

[Monkeybum]

I've used it now and again, and paid off in full after 30 days. But can see how you could get into trouble on it by constantly buying and extending the pay date. In lockdown one of my friends told me she paid a big chunk off her klana bill with money she'd saved but going out so think she may be of that ilk

 

[thatstupidcat]

I’m not a big fan, and wouldn’t use it. Give it a few years of recession, then a public inquiry following someone’s suicide and then it’ll go the same way as Wonga and Amigo Loans.

They bank on the desperate and financially illiterate for profit. Very shady.

 

[Eltonjohnsflorist]

I don’t know tbh. Any type of debt has the potential to be misused by people who don’t use it sensibly (this is only the same as catalogues/ credit cards etc)
BUT this does seem quite widely/ easily available. And very tempting.
On the other hand, it could genuinely help businesses keep sales at times like this.

 

[Mamacita]

I’m not a big fan, and wouldn’t use it. Give it a few years of recession, then a public inquiry following someone’s suicide and then it’ll go the same way as Wonga and Amigo Loans.

They bank on the desperate and financially illiterate for profit. Very shady.

So do credit cards do the same? To me it's like a credit card, if you're sensible with it then it's a great thing when you need it. I only buy things with it when I know I can pay it off when I get paid.

 

[Eltonjohnsflorist]

It’s difficult. It’s not financially illiterate to use credit, but it comes with a certain amount of privilege.

I was thinking about this the other day. As a homeowner I have the opportunity to borrow money very cheaply every few years when I remortgage. Providing I’m reasonably sensible this is a complete privilage- I can borrow £5k for a new bathroom etc etc. If you don’t have that privilege borrowing money is a lot more expensive and risky. This is just one slightly Murky side of the lending market but it’s hard to say it’s all about desperation and financial illiteracy

 

[Definitelyme]

Unfortunately I think it puts many people in a situation where they buy more than they can afford and get in to debt. Same with store cards etc. A large number of people will use it sensibly, but for some, it will lead to huge problems. Especially young people with less experience - they can suddenly buy x,y,z and not have to pay upfront! Brilliant! Except when they can’t pay at all.

 

[265]

If used properly this Klarna and other systems (and credit cards) can be a real benefit, however many people just lose their heads and next thing you know they are in massive debt.

 

[Isa Drennan]

Bad, I’ve cleared all mine as ASOS etc were letting me spend £100+ in one purchase which is too risky

 

[Marie20w0]

I think it amazing for people who are sensible. I use it as we can't try on in stores right now and sizing can be all over the place. I have always been sensible with spending and I pay it off immediately once a return has been received or if I know i am keeping an item but I have friends that I know this would be a complete disaster for.

 

[Hello Kitty]

I love Klarna and Clearpay, more Klarna though.

I've got abit on BNPL but the majority of my purchases are on the 30 day thing.

 

[They See Me Trolling...]

I’ve used it when I needed something before payday but I have always paid it as soon as I could. An example was I needed new work trousers for a new job and I had no money at all.

 

[annanuttall]

There was a story last year of a girl who ruined her credit rating for life (might be a bit of an exraggation) due to Klarna. Since then I've been a bit nervous using it.

 

[EyeSpy88]

If I want something before payday I will use every now again then just pay straight off, or if I’m not 100% on something and maybe will be sending back. It is worrying clearpay said I had £500 available to spend, that amount to payback within a few weeks is a lot and not something I would do, but someone else could see that and just go wild!

 

[MalletsMallet]

As with any credit lending, it can be great and work in your advantage but only when used properly. I have a really, really good credit score but haven't had that much on credit. We're going for a mortgage in the next two years and I know from my time in lending that lenders like to see you can pay credit back. Earlier this year I needed a new mattress. Rather than buy it outright (which I could), I got the 10 month interest free credit option from Klarna. Builds up my credit rating and I'm not losing out as there's no interest.

The clue with anything like this is to a) only buy things you actually need and b) make sure you pay it back before the interest free option runs out.

Unfortunately, the keeping up with the Jones' mentality is in over drive now. But apart from trying to keep up with your neighbours, young adults are trying to keep up with the entire world- or rather, the world they're exposed to through social media. The champagne lifestyle on lemonade budget has never been more prevalent. Sad thing is, these influencers are either up to their eyeballs in debt themselves or get so many things 'kindly gifted' that even they couldn't afford to own that many items- even on their very good salaries. Young people don't see this side of things and influencers will never be transparent as they're so tunnel visioned in selling themselves and their highly filtered lifestyles.

 

[HelloStereo]

I use it if I want to buy more than one size of something. I set a limit of what I can afford to spend on clothes each month, check the app regularly and make sure I never go over that limit.

 

[Lanavalentine]

I’ve never used it personally, but I’m not anti credit. I like to put online purchases on my credit card, but I pay it off in full every single month. I basically just use the credit card instead of the debit card because there are more benefits (added purchase protection, points collection and good for the ol’ credit score).

I would never purchase something that I couldn’t afford to buy via my debit card. I’m very aware of how privileged that makes me, though.

There is such a problem in this country with fair wages, where plenty of people live not in poverty, but certainly pay day to pay day, praying to have no nasty surprises that they’re forced to whack on a credit card and pay off over time (with added interest). I suppose there is a bit of worry that Klarna and the like are somewhat of a callback to the store credit shitshow of the early 2000s, especially when they’re so prominent on fashion and beauty online stores.

Hmmmm. I guess I am torn. Overall the responsibility lies with the individual user and it’s ultimately not a bad service, but the way it’s marketed, and the lack of financial responsibility taught in schools, for example, all make me rethink it a bit. For every responsible user there will always be someone who gets themselves into major trouble.