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16 Dec 2021


London, 16 December, 2021: Klarna, the leading global retail bank, payments, and shopping service, has today released new research that explores the personal finance habits of UK consumers, and reveals that credit card borrowing is fuelling anxiety and driving people into debt*. 

The research finds that customers of buy now pay later schemes were least likely to miss  a payment (6%), compared to traditional credit cards where nearly 16% of respondents reported having missed a payment. In addition, the survey found the highest source of debt is by far from credit cards at 50% followed by borrowing from a high street bank (25%), and taking out a payday loan (23%), highlighting the concerning levels of consumer debt racked up from outdated forms of credit. 

When it comes to borrowing, research shows that women are less likely to be in debt with over half (53%) stating they've never been in debt compared to only 46% of men. Furthermore, Gen Z are far less likely (27%) than Gen X to be in debt (52%), which could be because they are less likely to use credit cards, with thousands of UK borrowers turning away from this high cost form of borrowing every year**. 

Alex Marsh, Head of Klarna UK, comments, “It’s reassuring to see that consumers are becoming ever more aware of the reality of credit card borrowing. For too long people have assumed that credit cards are the safe option because they are associated with well-established household names, when in fact they exist purely to profit from consumer misery, pushing sky-high credit limits and charging extortionate interest rates and fees that trap them into long term debt.”

This comes as BNPL customers cite the flexibility it brings (33%), allowing them to better manage their spending (30%) and plan for monthly outgoings (27%) as reasons to ditch their credit cards.

Alex Marsh adds, “Unlike credit cards, Klarna doesn’t add anything to the cost of purchases - no hidden fees or interest - which makes it a fairer and more sustainable form of credit. We check that consumers can repay every time they use Klarna and give them a clear, short term repayment plan so they don’t stay in debt.”


Notes to editors

* Censuswide survey commissioned by Klarna amongst 2,000 UK respondents. Conducted December 2021

** Bank of England data, 2021

For more information, please contact: klarna@mhpc.com

About Klarna

We make shopping smooth. With Klarna consumers can buy now and pay later, so they can get what they love today. Klarna’s offering to consumers and retailers include payments, social shopping, and personal finances. Over 250,000 retail partners, including H&M, IKEA, Expedia Group, Samsung, ASOS, Peloton, Abercrombie & Fitch, Nike and AliExpress have enabled Klarna’s innovative shopping experience online and in-store. Klarna is one of the most highly valued private fintechs globally with a valuation of $45.6 billion. Klarna was founded in 2005, has over 4,000 employees and is active in 19 countries. For more information, visit klarna.com.