Credit Building > Can Klarna Help You Get a Credit Card?

Can Klarna Help You Get a Credit Card?

Wollit Team4 minute read · Updated 26th February 2025

If you're exploring payment options and considering the Klarna credit card, you might be wondering whether it can help you build credit or eventually qualify for a traditional credit card. Understanding how the Klarna Card works and its relationship with credit reporting is essential for making informed financial decisions.

What is the Klarna Card and how does it work?

The Klarna Card is a payment card that offers users flexibility in how they pay for purchases. Unlike conventional credit cards issued by banks, the Klarna Card functions as an extension of Klarna's Buy Now, Pay Later service, allowing users to pay for purchases in full, later, or in instalments.

Connected directly to your Klarna account, the card lets you make purchases wherever Visa is accepted. When you use the Klarna Card, you can manage your payments through the Klarna app, choosing from options like paying in full at the end of the month, splitting payments into four instalments (Pay in 4), or in some cases, financing larger purchases over several months.

One of the card's most attractive features is the absence of annual fees, making it accessible to users who want payment flexibility without recurring charges. The card also doesn't typically charge foreign transaction fees, adding to its appeal for international shoppers or travelers.

The Klarna Card essentially brings the company's digital payment flexibility into a physical card format, extending the Buy Now, Pay Later concept beyond online shopping to in-store purchases and everyday spending.

Can the Klarna Card help you build credit or qualify for a traditional credit card?

A crucial distinction between the Klarna Card and traditional credit cards is their relationship with credit reporting. Currently, the Klarna Card does not report payment activity to major credit bureaus in most markets. This means that even if you make all your Klarna Card payments on time, this positive behavior typically won't appear on your credit report or contribute to improving your credit score.

While the Klarna Card offers convenient payment flexibility, it is not designed as a credit-building tool. If your primary goal is to establish or improve your credit history to eventually qualify for traditional credit products, the Klarna Card may not be the most effective choice.

For those specifically looking to build credit, other financial products are explicitly designed for this purpose. If you're interested in improving your credit profile to qualify for traditional credit cards in the future, you might want to explore options that are specifically designed to help you get the credit score you deserve and report your responsible financial behavior to credit bureaus.

What are the benefits and drawbacks of using the Klarna Card compared to other financial tools?

Benefits:

Flexible payment options: The card allows users to choose how they want to pay for each purchase, whether in full at the end of the month or spread over time using options like Pay in 4.
No annual fees: Unlike many traditional credit cards, the Klarna Card doesn't charge recurring annual fees, making it cost-effective for occasional users.
No foreign transaction fees: Users can shop internationally without incurring additional fees from Klarna, though your bank might still apply currency conversion charges.
Instant access: Upon approval, users receive immediate access to a virtual card that can be added to digital wallets for immediate use.
Cashback opportunities: The card offers cashback when shopping at select retailers through the Klarna app, providing additional value.
User-friendly app integration: The Klarna app provides a streamlined interface for managing payments, tracking spending, and accessing card features.

Drawbacks:

Doesn't build credit: Perhaps the most significant limitation is that the Klarna Card doesn't report to credit bureaus, meaning it can't help build or improve your credit score.
High interest rates for financing: If you choose financing options rather than paying in full or using Pay in 4, the interest rates can be higher than many traditional credit cards.
Limited rewards compared to traditional credit cards: While the Klarna Card offers some cashback opportunities, these are typically more limited than the rewards programs offered by many traditional credit cards.
Dynamic spending limits: The variable nature of the spending limit means you can't always predict how much you'll be able to spend, which can be inconvenient for large purchases.
Limited history requirement: New Klarna users may not immediately qualify for the card, needing to establish a positive payment history with other Klarna services first.

Klarna Card alternatives for building credit

If your main objective is to build credit to eventually qualify for premium traditional credit cards, several alternatives may better serve your needs:

Secured credit cards: These cards require a security deposit that typically becomes your credit limit. They report to credit bureaus and are specifically designed for those looking to establish or rebuild credit.

Student credit cards: Designed for college students with limited credit history, these cards often have more lenient approval requirements while still reporting to credit bureaus.

Credit-builder loans: These specialized loans place the borrowed amount in a secured account while you make payments. Once paid off, you receive the funds, and the positive payment history is reported to credit bureaus.

Authorized user status: Being added as an authorized user on a family member's credit card with a positive payment history can help build your credit profile.

Credit-building services: Specialized services exist to help report regular payments like rent or utilities to credit bureaus, helping establish positive payment history.

For those specifically focused on building credit, these alternatives may provide more direct pathways to establishing the credit history necessary to qualify for traditional credit cards in the future.

Making the right choice for your financial goals

Whether the Klarna Card is right for you depends entirely on your specific financial goals and priorities. If payment flexibility and avoiding annual fees are your primary concerns, the Klarna Card might be an attractive option. However, if building credit is your main objective, you may be better served by financial products specifically designed for that purpose.

When deciding between the Klarna Card and other payment options, consider:

Your credit-building goals and timeline
How important payment flexibility is to you
Your spending habits and budget
Whether you value rewards and perks
Your current credit situation and eligibility for various financial products

By aligning your choice with your specific financial objectives, you can select the payment tool that best supports your long-term financial health and goals.