Credit Building > Klarna Card Review: 7 Key Features You Should Keep in Mind

Klarna Card Review: 7 Key Features You Should Keep in Mind

Wollit Team5 minute read · Updated 26th February 2025

Are you considering the Klarna Card as a flexible payment option? This Klarna Card review examines the key features, benefits, and potential drawbacks of this increasingly popular payment method. If you're looking for alternatives to traditional credit cards or want to expand your payment options, understanding what the Klarna Card offers can help you make an informed decision.

1. What is the Klarna Card?

The Klarna Card is a payment card designed to offer flexible payment options for purchases, both online and in physical stores. It functions similarly to Klarna's Buy Now, Pay Later service but in a physical card format that gives you more versatility in how and where you shop.

Unlike traditional credit cards, the Klarna Card is not a revolving credit product where balances can build up indefinitely. Instead, it allows users to split payments or pay later for purchases, providing more structure to repayment terms. This can be particularly appealing for those who want to avoid the potential debt cycle of conventional credit cards.

One of the most significant advantages of the Klarna Card is its wide acceptance. The card works anywhere Visa is accepted, making it versatile for everyday spending across millions of locations worldwide. This gives users the flexibility of Klarna's payment options without limiting where they can shop.

2. Flexible Payment Options

The Klarna Card's primary selling point is its flexible payment structure, which gives users more control over how they manage their finances. When making a purchase with the Klarna Card, users can choose between paying in full at the end of the month or splitting payments into instalments.

For users who opt to pay in instalments, interest rates typically range from 14.99% to 33.99%, depending on the terms offered and your personal eligibility. While these rates are comparable to many traditional credit cards, it's essential to understand that the interest can add up quickly on larger purchases if you extend payments over a longer period.

This flexibility can be particularly helpful for managing budgets and cash flow, allowing users to make necessary purchases without waiting until they have the full amount available. However, it's important to fully understand the terms of each payment option to avoid potentially high-interest charges that could outweigh the convenience factor.

3. No Annual Fees or Hidden Costs

In an era where many financial products come with various fees and charges, the Klarna Card stands out by not charging an annual fee. This is a significant advantage for users who want to avoid recurring costs associated with holding the card.

The absence of hidden fees is another key benefit of the Klarna Card. The company prides itself on transparency regarding costs, making it easier for users to understand exactly what they're paying for. This clarity helps users make more informed decisions about their purchases and payment plans.

However, users should be aware that while there are no annual or hidden fees, there are potential late fees if payments are missed. These fees can vary based on your region and the specific terms of your agreement. Always review the terms and conditions carefully to understand what penalties might apply if you miss a payment deadline.

4. Cashback and Rewards

For those who enjoy earning rewards on their spending, the Klarna Card offers a cashback program that allows users to earn up to 10% back on purchases. This feature makes the card particularly appealing to those who want to maximise the value of their everyday spending.

The cashback program works through the Klarna app, where users can browse and activate offers from participating retailers. Once activated, purchases made with the Klarna Card at these retailers will earn cashback at the specified rate, which is then credited back to the user's account.

It's worth noting, however, that the cashback is primarily applicable for purchases made through the Klarna app. This means that spontaneous in-store purchases might not always qualify for rewards unless you've activated relevant offers beforehand. For those who plan their shopping carefully, this system can be advantageous, but it may not benefit all users equally, particularly those who prefer to shop more spontaneously.

5. Eligibility and Credit Checks

To qualify for the Klarna Card, prospective users must meet specific eligibility criteria. At a minimum, applicants must be at least 18 years old and pass Klarna's credit assessment process. Depending on your region, additional requirements may apply.

Unlike some of Klarna's other buy-now-pay-later services that might only perform soft credit checks, the Klarna Card application may involve a hard credit check. This is an important consideration because hard credit checks can temporarily impact your credit score, and multiple applications in a short period could have a more significant effect.

If you're focused on building or improving your credit score, the Klarna Card might not be the optimal choice since its impact on your credit profile can be limited. For those specifically looking to improve their creditworthiness, there are other options like secured credit cards or dedicated credit-building services that might be more beneficial. For a comparison of different approaches, you might want to explore Klarna versus traditional credit cards for credit score improvement.

6. Spending Limits and Financial Control

The Klarna Card provides users with a personalised spending limit based on their financial profile and creditworthiness. This limit isn't just arbitrary—it's designed to help prevent overspending and ensure users don't take on more financial obligations than they can handle.

For many users, especially those who have struggled with credit card debt in the past, having this built-in ceiling can be a valuable feature. It offers the convenience of card payments while providing guardrails against accumulating revolving debt, which is a common issue with traditional credit cards.

The spending limit is not static; it can evolve based on your payment history and relationship with Klarna. Responsible use may lead to increased limits over time, giving users more flexibility as they demonstrate reliable payment behaviour. This gradual approach to credit exposure can be particularly beneficial for those working to improve their financial management skills.

If you're interested in exploring other financial products with similar approaches to responsible spending, you might find our Zable credit card review informative as a comparison point.

7. Does the Klarna Card Improve Your Credit Score?

For many consumers, the potential impact on their credit score is an important consideration when choosing a payment method. Currently, Klarna does not consistently report all payment activity to credit bureaus, which means using the Klarna Card may not directly improve your credit score in the same way as a traditional credit card with regular reporting.

This inconsistent reporting approach means that while responsible use of the Klarna Card—making payments on time and managing your account well—demonstrates good financial habits, these positive behaviours might not be reflected in your credit file. For those specifically looking to build credit, this is an important limitation to consider.

However, it's worth noting that Klarna has been expanding its credit reporting practices, and in some markets, they have begun reporting certain activities to credit bureaus. Additionally, late or missed payments might still be reported negatively, so while on-time payments might not help your score, missed payments could potentially harm it.

For a more comprehensive understanding of how Klarna's services interact with credit scores, you might want to read our detailed analysis on whether Klarna improves your credit score.

Is the Klarna Card Right for You?

The Klarna Card offers several attractive features that make it worth considering for many consumers. Its flexibility, wide acceptance, lack of annual fees, and potential for cashback rewards make it a compelling alternative to traditional credit cards for certain types of users.

The card might be particularly suitable for:

Those who want payment flexibility without the temptation of revolving credit
Shoppers who value cashback and rewards on their purchases
People who prefer structured payment plans to help with budgeting
Users who want a widely accepted payment card without annual fees

However, it might be less ideal for:

Those primarily focused on building their credit score
People who might struggle with the temptation of instalment payments
Users who prefer a single payment method across all their shopping

Before applying for the Klarna Card, it's worth considering how it fits into your overall financial strategy and whether its features align with your specific needs and goals. By understanding both its benefits and limitations, you can make a more informed decision about whether this payment option is right for your situation.

Remember that responsible use of any financial product, including the Klarna Card, is key to maintaining good financial health. Always ensure you can comfortably meet payment obligations before making purchases, and carefully review the terms and conditions to fully understand what you're signing up for.