Credit Building > What Is the Klarna Credit Card and How Does It Work?

What Is the Klarna Credit Card and How Does It Work?

Wollit Team5 minute read · Updated 26th February 2025

If you're exploring new payment options that offer more flexibility than traditional credit cards, the Klarna Credit Card might have caught your attention. This innovative payment card combines the convenience of a standard credit card with Klarna's signature flexible payment options, giving users more control over how and when they pay for purchases.

What is the Klarna Credit Card?

The Klarna Credit Card is a payment card powered by Visa, designed to offer flexible payment options for everyday purchases. Unlike traditional credit cards that lock you into specific payment schedules, the Klarna Credit Card allows users to pay in full, later, or in instalments, depending on their financial preferences and needs.

One of the key distinguishing features of the Klarna Credit Card is its integration with the Klarna app. Through the app, users can manage their payments, track spending patterns, and access exclusive features and offers. This digital-first approach gives cardholders more control and visibility over their finances than many conventional credit cards provide.

The card essentially brings Klarna's Buy Now, Pay Later functionality into a physical card format, extending the flexible payment model beyond online shopping to in-store purchases and everyday spending.

Features of the Klarna Credit Card

The Klarna Credit Card comes with several noteworthy features that set it apart from traditional credit cards:

Flexible Payment Options: With the Klarna Credit Card, users can choose how they want to pay for purchases. Options include paying immediately, at the end of the month, or splitting payments over time. This flexibility allows cardholders to adapt their payment strategy based on their financial situation.

No Annual Fees: Unlike many traditional credit cards, the Klarna Credit Card does not charge annual fees. This makes it a cost-effective option for users who want payment flexibility without recurring charges.

Abroad Shopping: The card allows users to shop internationally without incurring foreign exchange fees from Klarna. This can be particularly valuable for frequent travellers or those who regularly make purchases from international retailers.

Cashback Opportunities: Cardholders can earn cashback on purchases made through the Klarna app at select retailers. This rewards feature adds value beyond the payment flexibility the card offers.

Visa-Powered Security: As a Visa card, the Klarna Credit Card benefits from Visa's robust security infrastructure, ensuring secure transactions wherever Visa is accepted worldwide.

Benefits of the Klarna Credit Card

The Klarna Credit Card offers several benefits that make it an attractive option for many consumers:

Budget-Friendly Payments: By allowing users to spread the cost of larger purchases over manageable instalments, the card makes budgeting easier and more adaptable to individual financial situations.

Transparency: The card emphasizes clear due dates and upfront information about any fees or interest that might apply. This transparency helps users make informed decisions about their payment options.

Improved Spending Control: The Klarna app allows users to track and manage all their card purchases in one place. This visibility can help cardholders maintain awareness of their spending patterns and stay within budget.

No Hidden Costs: The card aims to eliminate unexpected charges by maintaining transparent terms and conditions. Users know exactly what they're signing up for and what costs might apply in different scenarios.

Convenience: The Klarna Credit Card can be used for both online and in-store purchases, including abroad. This versatility makes it a convenient payment option for various shopping contexts.

How to Apply for the Klarna Credit Card

Getting your hands on a Klarna Credit Card involves meeting certain eligibility criteria and following a straightforward application process:

Eligibility Requirements:

Must be at least 18 years old
Be a resident of the UK
Have a history of on-time payments with Klarna (for existing Klarna users)
Pass a credit assessment, which may include a soft or hard credit check

Application Process:

Apply through the Klarna app or website by filling out the required information
Upon approval, receive a virtual card instantly, which can be added to Apple Pay or Google Pay for immediate use
A physical card will be sent to your address for in-store purchases

The application process is designed to be quick and user-friendly, with many approved applicants able to start using their virtual card immediately while waiting for the physical card to arrive.

How Does the Klarna Credit Card Work?

The Klarna Credit Card operates with a flexible model that gives users more control over their payment schedule than traditional credit cards:

Payment Options:

Pay in full at the end of the month, interest-free
Extend the due date to the next month for a small fee
Split payments over 3, 6, or 12 months for larger purchases, with a fixed interest rate

Managing Payments:

All purchases are bundled into a monthly statement, easily accessible via the Klarna app
Users can set up automatic payments to avoid late fees and maintain a good credit history
The app provides notifications and reminders about upcoming payments

Spending Limits:

The card comes with a personalised spending limit based on the user's creditworthiness
Purchase power is reassessed in real-time based on repayment history and outstanding balances
Responsible use may lead to increased limits over time

This flexible approach to payments allows users to adapt their repayment strategy based on their current financial situation, offering more freedom than the rigid payment structures of traditional credit cards.

Klarna Credit Card Fees and Interest Rates

Understanding the cost structure of the Klarna Credit Card is essential for making informed decisions about how to use it:

No Annual Fees: The card is free to use without recurring annual charges, making it accessible to a wide range of users.

Interest Rates:

The pay-in-full option at the end of the month incurs no interest
Extending payments may include a fee, which is disclosed upfront
Instalment plans for longer periods include a fixed interest rate, which is clearly communicated before choosing this option

Late Fees: A £5 fee applies for missed payments, but users can avoid this by enabling autopay in the Klarna app.

Foreign Exchange Fees: Unlike many traditional credit cards, Klarna does not charge additional fees for international transactions, making the card attractive for travel or shopping from international retailers.

The transparent fee structure allows users to understand exactly what they'll pay in different scenarios, avoiding the surprise charges that can come with some traditional credit products.

Is the Klarna Credit Card Right for You?

The Klarna Credit Card might be a good fit for you if:

You seek flexible payment options without the long-term commitment of traditional credit cards
You want to improve your credit score by managing payments responsibly
You regularly shop online and in physical stores and want a unified payment solution
You travel internationally and want to avoid foreign transaction fees
You prefer a digital-first approach to managing your finances

The card is particularly well-suited for those who want more control over when and how they pay for purchases, without being locked into rigid payment schedules. For a comprehensive comparison of Klarna versus traditional credit cards, consider your personal financial habits and goals before making a decision.

Is the Klarna Credit Card Safe?

Safety is a primary concern when considering any financial product, and the Klarna Credit Card addresses this in several ways:

Transaction Security: The card is powered by Visa, ensuring secure transactions at millions of locations worldwide. Visa's fraud protection services add an additional layer of security for cardholders.

Purchase Protection: Purchases made with the card may be eligible for Section 75 protection under the Consumer Credit Act, offering additional peace of mind for larger purchases.

Credit Reporting: Klarna reports card usage to credit reference agencies, which means responsible use can positively impact your credit profile. Conversely, missed payments could negatively affect your credit score.

App Security: The Klarna app incorporates modern security features to protect user data and transaction information, including biometric authentication options.

For a more detailed examination of Klarna's safety features and practices, you might want to read about whether Klarna is safe to use for your financial transactions.

Conclusion

The Klarna Credit Card represents an evolution in payment options, combining the widespread acceptance of a traditional credit card with the flexibility of Buy Now, Pay Later services. Its integration with the Klarna app provides enhanced visibility and control over spending and payments, while the absence of annual fees and foreign transaction charges makes it financially attractive for many users.

As with any financial product, responsible use is key to maximizing the benefits while avoiding potential downsides. By understanding how the card works and aligning its features with your personal financial needs and habits, you can make an informed decision about whether the Klarna Credit Card is the right choice for your wallet.