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Feb 11, 20221 min read

Do you feel left in the dark by your credit card T&Cs? You’re in good company.

by Alex Marsh

What is the interest rate on your credit card? Don’t remember? You’re not alone. According to a survey of over 2,000 Brits we recently conducted with YouGov, 6 out of 10 of us don’t know how much paying with a credit card could cost us. 

And yet, it is something we *should* know. Credit card interest rates are at their highest rate in two decades… the average is 21% but they can go up to 50% and even higher. So not knowing your interest rate could cost you a lot of money.

It’s also something the Government and regulators want you to know, and quite right too. The regulations on credit card companies – and any provider of regulated credit – are extremely prescriptive. They outline in great detail the information a lender needs to provide, when and in what format. 

The problem is, despite the vast majority of lenders ticking the box when it comes to following this very specific regulation to the letter, consumers still don’t remember the most basic information – how much will it cost me if I buy something with this card?

At Klarna, we want to be the fairest, most transparent provider in the industry. We work hard to find ways to provide consumers with key information they need to make good financial choices and in ways which consumers will engage with. As an example, we engaged the consumer organisation Fairer Finance to help us ensure our consumer-facing communications and our Ts&Cs are clear, fair and transparent. Crucially, we do this regardless of whether we are offering a regulated, or unregulated product.

Here’s an example of how we do this on the checkout for our Pay in 3 product, which is currently not covered by the Consumer Credit Act. 

By showing this information to consumers, at the right moment as they are making a purchase, and in a clear, easy-to-understand format, we ensure that consumers know exactly what they need to pay and when. As a result, we drive much better outcomes for our consumers than traditional credit providers. 40% of orders are fully repaid *before* the payment due date, we have phenomenally low complaint rates and not a single complaint about our Ts&Cs. 

So what is the interest on your credit card? You should be able to find it on your latest statement. Go and check it out now – it’s probably higher than you think.


Copyright © 2005-2023 Klarna Bank AB (publ). Klarna Bank AB (publ) is authorised and regulated by the Swedish Financial Supervisory Authority. Deemed authorised by the Prudential Regulation Authority. Subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority. Details of the Temporary Permissions Regime, which allows EEA-based firms to operate in the UK for a limited period while seeking full authorisation, are available on the Financial Conduct Authority’s website. Klarna Bank AB offers both regulated and unregulated products. Klarna’s Pay in 3 instalments and Pay in 30 days agreements are not regulated by the FCA. Klarna Bank AB (publ) registered and head office: Sveavägen 46, 111 34 Stockholm, Sweden. A Swedish public limited company (publikt bankaktiebolag) registered with the Swedish Companies Registration Office with organisation number: 556737-0431.