BUY NOW, PAY LATER giant Klarna is launching its first-ever debit card that you can use in shops and online for spending.
The Buy Now Pay Later (BNPL) provider will now offer a flexible Visa debit card for UK shoppers, which can be converted into a credit card.
Currently, Klarna operates as an app that allows customers to spread payments when they shop online.
It is offered as a payment option when at online checkouts, with retailers such as Vinted and ASOS letting customers use the app to spread payments.
In 2022, the Swedish fintech also launched a credit card, which allows customers to use the service in-store too.
It means customers can pay for shopping up front, but then have the option to switch to a flexible payments option in the app.
The card is linked to your Google or Apple Wallet, so you may need a smartphone to use the service.
The Sun has asked Klarna if customers will be given a physical card and will update this piece when we hear more.
Like other debit cards, you can transfer money into your virtual “Klarna Balance” account and pay for items in shops or online.
The provider also said it will allow for cashback rewards for certain Klarna purchases.
EU and USA customers already have access to these services following a launch earlier this year.
David Sandström, chief marketing officer of Klarna says: “Traditional banks have taken the trust out of banking.
“We’re here to change that and our new Klarna Card puts you in control: the simplicity of debit with the flexibility of credit, all wrapped in a beautifully simple experience.”
Who can apply for a Klarna Card?
Klarna’s debit service is available to all customers, but only those who pass a credit check will have the option to spread payments or use the credit function.
That means anyone who has a Klarna account has the option to sign up for a debit card – which can be used to pay for goods upfront.
Credit checks are commonly carried out by lenders. It looks at customers’ outstanding debts and whether or not they make repayments on time – but if you’re rejected or make multiple applications for credit, it can affect your credit score.
Klarna is not the only lender to offer a flexible credit and debit card.
Digital bank Monzo also gives bankers the chance to spread out payments through its Flex service.
Customers can pay for an item up front and then chose to spread out the payments. This is managed through its banking app.
It gives you the option to pay back your purchase interest-free for over the cost of three months.
But interest is charged if you request to spread out the payments over longer six or 12 months instalments.
Is it right for you?
Scott Dixon, consumer and motoring disputes expert, said the card could be “potentially risky for cash-strapped consumers”.
“On the face of it, it gives people more control by allowing them to pay upfront or spread the cost when it suits”.
However the expert warned flexibility can “quickly spiral out of control if consumers don’t fully understand when they are dipping into credit and risk incurring interest or fees.”
Meanwhile, Adam French, head of news at Moneyfactscompare.co.uk, said:“The card is ‘debit-first’ by default, which means shoppers will be spending their own money unless they expressly switch to a pay later option.
“However, therein lies the risk as pay later and instalment options can too-easily tempt some shoppers into overspending, especially at a time when inflation is close to 4% and cost of living pressures are mounting.”
It is also worth noting that unlike using a credit card, ‘buy now, pay later’ does not currently give them Section 75 protection.
However, this set to change in July 2026 when new regulations are due to take effect.
Under Section 75 of the Consumer Credit Act, a credit card company can be held jointly liable for a purchase that turns out to be shoddy or does not materialise.
This means a shopper can potentially get a refund from the credit card company if they cannot recover their costs from a retailer.
Those using a debit card or credit card for purchases can also potentially get their money back via the chargeback scheme.
We have also asked Klarna if balances are protected and if customers will be required to pay interest fees if they miss a payment.
How to cut the cost of your debt
IF you’re in large amounts of debt it can be really worrying. Here are some tips from Citizens Advice on how you can take action.
Check your bank balance on a regular basis – knowing your spending patterns is the first step to managing your money
Work out your budget – by writing down your income and taking away your essential bills such as food and transport
If you have money left over, plan in advance what else you’ll spend or save. If you don’t, look at ways to cut your costs
Pay off more than the minimum – If you’ve got credit card debts aim to pay off more than the minimum amount on your credit card each month to bring down your bill quicker
Pay your most expensive credit card sooner – If you have more than one credit card and can’t pay them off in full each month, prioritise the most expensive card (the one with the highest interest rate)
Prioritise your debts – If you’ve got several debts and you can’t afford to pay them all it’s important to prioritise them
Your rent, mortgage, council tax and energy bills should be paid first because the consequences can be more serious if you don’t pay
Get advice – If you’re struggling to pay your debts month after month it’s important you get advice as soon as possible, before they build up even further
Groups like Citizens Advice and National Debtline can help you prioritise and negotiate with your creditors to offer you more affordable repayment plans.
