Klarna Launches BNPL Subscription Plan. Is It Worth It?

Buy now, pay later (BNPL) — but also pay every month. That’s the model for Klarna’s newly launched subscription program.

The financial services company, which allows shoppers to pay for purchases over time, recently announced a new $7.99 subscription plan called Klarna Plus. 

Here's how it works: In exchange for a monthly fee, subscribers can have fees waived from stores that are not included in the Klarna network. They can also earn double rewards through a club program and have access to exclusive discounts at various retailers, totalling $30/month.

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In announcing the plan, Klarna said that loyal customers, or those who use its services multiple times each month, can save up to $12 in fees. To get started and get $10 off your first purchase, visit the Klarna Plus website.

BNPL safeguards

BNPL plan usage is popular and hit an all-time high over the holidays, according to Adobe’s 2023 holiday shopping trend report. In the last few months alone, a number of companies including Google, Walmart and Apple have announced new BNPL offerings.

While subscribing to a service that is already in place to help you save cash or spread out your payments seems counterproductive, there are advantages, according to Klarna. The subscription will offer even more perks to Klarna customers who use BNPL as an alternative to high-interest credit cards, a company spokesperson told Kiplinger in an email.

"Akin to popular loyalty programs and fully regulated through our partnership with Webbank, Klarna Plus enhances the Klarna shopping experience with a monthly subscription that includes unique benefits like waived service fees and exclusive deals,” the spokesperson said.

“In contrast to credit cards, which underwrite large sums and charge sky-high revolving interest, Klarna Plus upholds our commitment to responsible lending," the spokesperson said, adding that Klarna already has many safeguards in place for its products.  These also apply to Klarna Plus users, the spokesperson said, "including individual lending decisions on each transaction and restricting the use of our services until missed payments are fulfilled to prevent debt from accumulating."

Late fees can pile up

But, as with any loan, late fees incurred by users who neglect to pay their installment payments on time can be a problem. Customers who are late on payments may also be reported to credit bureaus, according to Klarna’s website. For those already falling behind on payments, paying an additional $7.99 to save $12 per month may not be worth the cost. 

The launch comes amid growing concern over the hazards of using BNPL. As Kiplinger previously reported, an October 2023 report from the Center for Responsible Lending found that nearly half of BNPL users have incurred overdraft fees. 

Experts advise being mindful of using debt, which could help or hurt your long-term finances. For help on discerning good debt versus bad along with tips to manage it, check out this guide.

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