Do you need a credit card for klarna

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If you’re anti-credit card but want the convenience of splitting your purchases into four equal payments, the Klarna Card* will fill that gap. The card allows you to turn nearly any purchase into an interest-free “Buy Now, Pay Later” plan (BNPL), but this isn’t a true credit card, so you won’t build credit or get any perks like you would with a traditional credit card. And though there’s no annual fee the first year, a $3.99 monthly fee kicks in after that.

$0 intro annual fee for the first year, followed by a $3.99 monthly fee

Pros

• Purchases made with the card are interest-free
• No hard credit check to apply
• No annual fee for the first year

Cons

• There’s a monthly fee after the first year
• Payments must be made bi-monthly
• You have to have used Klarna at least once to apply for the card

Highlights

• No hard credit check.
• 0% APR on purchases, spread across 4 interest-free payments.
• $0 intro annual fee for the first year, followed by a $3.99 monthly fee.
• Spending limit, or Purchase Power, is reassessed on a real-time basis and will increase or decrease over time, depending on repayment history and outstanding purchases.

Credit Score ranges are based on FICO® credit scoring. This is just one scoring method and a credit card issuer may use another method when considering your application. These are provided as guidelines only and approval is not guaranteed.

Introduction

Klarna is aiming to turn every purchase you make into a BNPL transaction. The Klarna Card, which has an annual fee of $0 intro annual fee for the first year, followed by a $3.99 monthly fee, runs on the Visa network—but that’s about the only thing it has in common with a traditional credit card.

The card charges no interest, which in this case doesn’t simply mean an extended intro 0% APR period like you’ll see on some credit cards. And, unlike most credit cards, which allow you to carry a balance indefinitely but add finance charges in exchange for that privilege, purchases made on the Klarna Card have to be paid off in four bi-monthly installments.

This interest-free payment plan is the exact same structure as the point-of-service-loans made via the Klarna app. But an important distinction is that the Klarna card allows you to turn any purchase where the merchant accepts Visa into a BNPL purchase.

As part of the application and approval process for the card, you’re required to link your debit card to the Klarna Card*. Your payments can be automated or made manually on the due date.

The Klarna Card* also doesn’t report to the three main credit bureaus, so responsible payment behavior won’t help you build credit history. For those who are just starting to build credit and may be tempted by the “no hard credit pull” Klarna advertises, just know this card will not help you establish credit history or improve your credit score.

However, the lack of a hard inquiry upon application may be helpful for those who need to finance some big purchases but can’t get approved for a traditional credit card. That said, it’s worth noting most credit card issuers offer their own twist on installment payment plans, like Amex’s Plan It, Chase’s My Chase Plan and Citi’s Flex Loan.

The biggest potential downfall with the Klarna Card* is the same issue that all BNPL plans have: They may encourage you to overspend by making an impulse purchase seem more affordable.

Finally, someone with enough financial discipline to pay their balance in full and on time every month would be far better served by a card that offers rewards. For example, making a $2,000 purchase on a card that earns 2% cash back would snag you $40. If you pay your credit card balance in full by the end of a billing cycle, you also won’t incur any interest.

Compare Klarna Credit Card With Other Cards

$0 intro annual fee for the first year, followed by a $3.99 monthly fee

Credit Score ranges are based on FICO® credit scoring. This is just one scoring method and a credit card issuer may use another method when considering your application. These are provided as guidelines only and approval is not guaranteed.

Upgrade Cash Rewards Visa®

Credit Score ranges are based on FICO® credit scoring. This is just one scoring method and a credit card issuer may use another method when considering your application. These are provided as guidelines only and approval is not guaranteed.

Secured Chime Credit Builder Visa® Credit Card

Credit Score ranges are based on FICO® credit scoring. This is just one scoring method and a credit card issuer may use another method when considering your application. These are provided as guidelines only and approval is not guaranteed.

At a Glance

• $0 intro annual fee for the first year, followed by a $3.99 monthly fee
• No hard credit check to apply (but they will do a soft one)
• Payments for purchases must be made in four bi-weekly equal installments
• Join Klarna rewards club to earn rewards

Klarna Card Rewards

The Klarna Card* doesn’t offer rewards on every purchase, but similar to other purchases made via Klarna, users can complete “missions” to earn points that can be redeemed in the Klarna App for rewards at participating brands in the form of gift cards or vouchers. Brands include H&M, Amazon, Walmart, Footlocker and more.

Other Klarna Card Benefits

• Instant Notifications: Cardholders will automatically receive real-time notifications via the Klarna app when they make a transaction, even if it’s declined.
• Contactless Payments: Can sync with Apple Pay and Google Pay for contactless payments where accepted.
• Budgeting Features: Cardholders can set a monthly allowance for themselves in the app to control how much they spend with Klarna and track their spending levels month-over-month.

Fine Print

Interest Rates

• Regular APR: 0% fixed APR
• Purchase Intro APR: N/A
• Balance Transfer Intro APR: N/A

Fees

• Annual Fee: $0 intro annual fee for the first year, followed by a $3.99 monthly fee
• Balance Transfer Fee: See Terms
• Cash Advance: See terms
• Foreign Purchase Transaction Fee: None

How the Klarna Card Stacks Up

It may not be a BNPL plan, but the no-annual-fee Upgrade Cash Rewards Visa® is a real credit card that also has an installment repayment plan. The difference here is that the Upgrade Cash Rewards does charge interest, but it’s baked into the monthly payments. Also in contrast to the Klarna Card*, the Upgrade card earns 1.5% unlimited cash back on card purchases with every payment, comes with some Visa Signature benefits and—crucial for those trying to improve their credit—will report your payment behavior to the three major credit reporting agencies.

If you’re just starting your financial journey and can only get a secured credit card based on your limited credit history, the Secured Chime Credit Builder Visa® Credit Card may be music to your ears. It won’t ding you with an annual fee or interest charges, and there’s no minimum security deposit, making it one of the most affordable options in its class.

There’s no credit check to apply, but you’ll have to open a Chime spending account and have a qualifying direct deposit of at least $200 before you can open your Secured Chime Credit Builder Visa® Credit Card.

One key difference between the Chime and Klarna Card* is that the Chime card has to be paid in full each month, but the Klarna Card* spreads out your payments over eight weeks. And, the Chime card can help build credit, unlike the Klarna Card*.

There’s one compelling reason to get the U.S. Bank Visa® Platinum Card: It comes with a whopping 0% intro APR on purchases and balance transfers for 18 billing cycles, followed by a variable APR of 18.74% - 28.74%. A balance transfer fee of either 3% or $5 applies, whichever is greater. If you’re looking to finance a large purchase or pay down some existing debt, this card will give you nearly two years to do so.

There’s no annual fee for this card. And, as a true credit card, it also comes with some built-in protections—like cell phone coverage of up to $1,200 annually for damage or theft when you pay your monthly cell phone bill with your card and basic Visa benefits like ID Theft Protection.

It’s also worth noting that this card is eligible for U.S. Bank’s ExtendPay Plan, a pay-over-time installment plan that doesn’t charge interest, but does charge a small monthly fee.

A word of caution, however. Credit cards with long 0% intro APR offers like this one typically require applicants to have good-to-excellent credit. So, if you have limited credit history or have a damaged credit score, you might not get approved for the U.S. Bank Visa® Platinum Card.

Is the Klarna Card for You?

Someone who finds the transparent payment structure of BNPL plans appealing may be drawn to the Klarna Card* for its unique ability to make every purchase payable in four bi-weekly installments without added finance charges.

But, since the card doesn’t report to the major credit bureaus or have the protections and other features of a traditional credit card, it may not be the right choice for those looking for more flexible payments, credit building or traditional credit card rewards.

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