Klarna is a Swedish bank founded back in 2005 that offers retailers and their customers the payment option to pay later for their purchases. In the last 15 years since they have been established, they have grown to become one of the biggest banks and buy now pay later brands in the UK and Europe.

To check out using Klarna with selected partnered retailers, you will need to select Klarna as your payment method when you check out and choose your payment plan. You'll also need to sign up for a Klarna account if you haven't done so already.

Klarna offers it’s customers three main products to choose from, which each work differently, such as;

• Pay later: Delaying the cost of the purchase over 30 days.
• Slice it: Spreading the costs into instalments over 6 to 36 months.
• Slice it in 3: Spreading the costs equally over three months.

A wide variety of both high-street and luxury retailers are now signed up to let their customers buy now and pay later with Klarna, some of the brands that use Klarna include;

• Charlotte Tilbury
• H&M
• Topshop
• Michael Kors
• Made.com
• Halfords
• Burton
• Sweaty Betty
• Skinny Dip
• Ugg
• And many more

Unlike traditional payment methods and pay later products, Klarna has no set credit limit. Instead, Klarna will assess every purchase individually, ensuring the customer's affordability.

Once you have signed up, Klarna will set you a limit to how much credit you can use. Your credit limit is shown in your account portal and can increase ensuring your affordability and creditworthiness warrants them to do so.

There are no hidden fees for using Klarna; however, while Pay Later and Slice it in 3 charges no interest, you will be charged interest at 18.9% APR if you choose Slice it.

In addition to this late payment, charges will be applied on all products if you fail to keep up with your repayments, which can also affect your credit score. You may also be charged if you are using a credit card to make payment by your bank.

For the Pay later and Slice it in 3 payment plans, Klarna will perform a soft credit check to see whether you are suitable for credit. Soft credit checks will leave an entry on your report, but not a full search.

If you choose Slice it, then you will undergo a full credit check to determine whether you are eligible for credit or not. Hard credit checks will leave a full search entry on your credit report that will be visible to anyone who views your credit report.

Repayments will be taken automatically from the credit or debit card you provided when you signed up. In addition to these repayments, you can also make manual payments by visiting the Klarna app or signing into your account portal online.

All standard returns procedures will apply and all returns will be processed by the retailer with who you may the purchase. Once your return has been received the retailer can then refund Klarna.

If you used Slice it as your payment method, then once your refund has been received your account will show a positive balance, meaning you'll be able to make a purchase without applying to borrow more money.

If you used Slice it in 3 or Pay Later, then the refund will be issued back to the card you signed up with. You should receive your refund within 14 days.

Klarna have a buyer’s protection policy to ensure and protect the rights of any customers who use the service. Essentially this protects customers in the event that the goods you ordered do not arrive, are defective or not what you thought you were purchasing.

They are also European Economic Area (EEA) Authorised. Klarna Bank AB (publ) is regulated by the Swedish Financial Supervisory Authority (SFSA) as it is a Swedish bank and holds banking license is in Sweden. However, they are also currently obliged to comply with several Financial Conduct Authority (FCA) rules in the UK as they passport their banking license to the UK.

When you sign up to use this particular buy now pay later payment method, you will need to ensure you provide the following information;

• Full name
• Email address
• Date of birth
• Current billing address
• Valid UK credit or debit card details

If payment is not able to be taken from your account, the amount will attempt to be retaken seven days later. If the payment is still unable to be taken, Klarna will try again before issuing a late payment fee. Non-payment will affect your ability to use Klarna as your payment in the future.

It is also worth noting that late and non-repayments will be documented on your credit file.