The truth about Klarna in the US

Traditional credit providers are failing consumers. For too long, credit card companies and traditional banks have been exploiting consumers with sky-high interest rates and rip-off fees. The system is broken, and it will crack. Klarna is different. We are a global leading payments network and financial assistant that accelerates commerce by offering fairer, more sustainable, innovative solutions. We’re committed to providing a seamless and secure shopping experience that helps our customers save time, save money, and worry less.  By publishing our facts and figures with full transparency, including age demographics, repayment rates, and late fee rates among others, we’ll demonstrate that interest-free BNPL leads to better consumer outcomes than traditional credit.

An alternative to spiraling credit card debt

Klarna is well known as a leader in “Buy Now, Pay Later,” but as the industry faces heavy criticism around offering predatory credit products to consumers, it is more important than ever for us to show how we are inherently different in our credit offerings from both the traditional financial services and BNPL industry at large.


41% of American credit card users are revolving month-to-month (Klarna x Harris Poll survey). In stark contrast, 96% of Klarna’s Pay in 4 customers paid their bills off early or on time, and only 4 % incurred a late fee. 51% of credit card holders now carry revolving debt at 14.8% interest (JD Power)


Credit card debt hit a high of $1.13 trillion in 2023 according to the Federal Reserve Bank of New York. With credit card interest rates as high as 36%, Americans are looking for more sustainable payment alternatives. Compare that with Klarna’s 0% BNPL interest rate.


10% of credit card users have had a credit card payment go into debt collection over the last year (Klarna x Harris Poll survey). In comparison, Klarna’s Pay in 4 orders referred to debt collections have remained below 2.5% over the last year.


Over 90% of purchases are made with Klarna’s interest-free Pay in 4 option. Compare that to other BNPL providers where the majority of purchases are interest-bearing.

The beginning of fair and sustainable payment methods

Klarna was founded in 2005 and launched in the US in 2015. We exist to make payments more secure, transparent, and frictionless. Unlike credit cards and other BNPL providers which make the majority of their money from consumer interest, our business model is built on charging retailers.


Klarna balance repaid

Less than 1%

Global default rate


pay us back early in the US

Klarna's payment products

Pay in 4

Consumers pay in four interest-free installments. The first payment is taken when a consumer’s order is shipped, and the remaining three payments are automatically charged every two weeks afterwards, with zero interest. Pay in 4 makes up over 90% of our purchases.

Pay in 30

Consumers pay the full amount 30 days after purchase. Consumers receive their order up front and get up to 30 days to pay with zero interest so they can “try before you buy.”

Pay Now

Consumers pay immediately and in full. Pay Now makes up about one third of Klarna transactions globally.


Our traditional regulated credit product for the purchase of higher-ticket items. The majority of these payment plans last between 6-24 months. Offered interest-free or interest-bearing depending on the retailer. APR ranging from 0-33.99%.

Over 99% of our lending is repaid

Any late payment is a failure on us

It’s not in our interest to lend to people who can’t pay us back. In fact, this impacts our business negatively. If a customer misses an installment, Klarna notifies them through various personal channels and sends clear follow up reminders to encourage timely payments. We may charge a late fee of up to $7 if any scheduled payment remains unpaid after 10 days, but the total of late fees charged on an order will never exceed 25% of the total purchase amount.

If all four installments have not been paid, we will send a final warning offering the customer an additional grace period of 21 days to settle their outstanding balance. The debt is then passed on to debt collection agencies.

Wikipink PI4 late fee

All age groups

Share of US Pay in 4 orders that have received a late fee

Our late fee rates for our most popular payment method, Pay in 4, are declining over time. This is a testament to Klarna’s business model and underscores our consumers pay responsibly and on time.

Wikipink DC rate updated

All age groups

Share of US Pay in 4 orders that have been referred to debt collection

As a result of our rigorous process, the amount of transactions referred to debt collections in the US have declined over time.

(US) Wikipink Service Late fees updated

Our late fees are significantly less when compared with others

(US) Pie early New

More Americans revolve than pay in full

  • In 2023 using our Pay in 4 option, 31% of Klarna customers paid their bills off early ahead of the payment due date, 65% paid on time on the due date, and 4% paid late and incurred a late fee.

  • In comparison 41% of American credit card users are carrying credit card debt month to month (Klarna x Harris Poll survey)

  • It would take an average American 2.5+ years to pay off their credit card debt if we took the average outstanding US credit card balance ($6,000), average APR rate (20%), and average paid off debt of $270 per month.

(US) Wikipink Waterfall Late fees NEW

96% of our BNPL purchases are paid early or on time

In 2023, 4% of orders received a late fee, 2% of total orders were paid after receiving a late fee and 2% of orders were handed over to a Debt Collector.

More than 95% of our Pay in 4 invoices are paid early or on time

Did you think that Klarna and credit cards are the same? Think again

Wikipink BNPL vs Credit Cards
(US) Age groups

Everyone is using Klarna

People across the world are using Klarna for their everyday spending — both online and in-store, across all types of verticals and industries. There’s no typical Klarna consumer. The average age of a Klarna user in the US is 36, and our fastest growing segment is Boomers (50+).

(US) Wikipink Trustpilot

Our customers love Klarna. And they have another thing in common – a deep distrust of traditional banks.

This is driving Klarna’s fast growth compared to legacy financial firms. Klarna is rated 4.1 = Great on TrustPilot, while traditional banks such as

, , , lag far behind.


Here are the sources for the externally provided information in each of the sections above

  • 41%

    • 41% of American credit card users are revolving month-to-month (Klarna x Harris Poll survey)

  • Rest of the sources are quoted in the text

  • All information comes from Klarna

  • All information comes from Klarna

  • The calculation of time taken to pay off Credit Card debt is based on:

  • The current highest credit card interest rate in the US is up to 36% according to

  • Credit card debt reached 1.13 Trillion USD in 2023 according to the

  • Average outstanding of 6000 USD comes from

  • 43% of credit card holders do not know the interest rate on their credit cards according to

  • All information comes from Klarna

  • All sources are linked to directly from the text

Monthly financing through Klarna and One-time card bi-weekly payments with a service fee to shop anywhere in the Klarna App issued by WebBank. Other CA resident loans at select merchants made or arranged pursuant to a California Financing Law license. Copyright © 2005-2024 Klarna Inc. NMLS #1353190, 800 N. High Street Columbus, OH 43215. VT Consumers: For WebBank Loan Products (One-Time Cards, Financing, Klarna Card): THIS IS A LOAN SOLICITATION ONLY. KLARNA INC. IS NOT THE LENDER. INFORMATION RECEIVED WILL BE SHARED WITH ONE OR MORE THIRD PARTIES IN CONNECTION WITH YOUR LOAN INQUIRY. THE LENDER MAY NOT BE SUBJECT TO ALL VERMONT LENDING LAWS. THE LENDER MAY BE SUBJECT TO FEDERAL LENDING LAWS.