Klarna vs Afterpay: Which Is Better For You?

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klarna vs afterpay
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Buy Now Pay Later, BNPL for short, is a great shopping hack when you want to buy what you need now and pay it off in installments, making it easier on your wallet. The BNPL provider you can use depends heavily on where you’re shopping. Big merchants like Target and Amazon accept several different providers. This flexibility in payment options opens the door to popular services such as Klarna and Afterpay, which have rapidly gained users by offering convenient payment plans.

Klarna, boasting a user base of nearly 150 million, and Afterpay, with 16 million active users, stand out as leading choices for consumers. If you’re scratching your head over Klarna vs. Afterpay, we’re here to help you learn what sets them apart and what they have in common.

What Are Afterpay and Klarna?

Afterpay and Klarna are BNPL providers that make it easier to buy things from brick-and-mortar or online stores using short-term credit. When you pay with Afterpay or Klarna in person or through online shopping, you can get what you bought now and repay the BNPL provider in installments, often interest-free, over the next several weeks or months.

The most common repayment option among BNPL providers is the pay-in-four model, which allows you to divide four payments over six weeks, with the first installment due when you check out with the merchant. The remaining payments are divided into equal payments due over the next six weeks.

From 30,000 feet up, Afterpay and Klarna have similar offerings; however, they differ when it comes to the nitty gritty.

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Major Differences Between Afterpay and Klarna

To decide which is better–Klarna or Afterpay–for your BNPL needs, we’ll compare them side by side in terms of their availability, offered payment plans, credit limits, fees, and more. By knowing the differences between Afterpay and Klarna, you can determine which best fits your shopping habits and financial preferences.

Afterpay Klarna
Founding Sydney, Australia, in 2014 Stockholm, Sweden, in 2005
Countries of operation U.S., Canada, United Kingdom, and New Zealand U.S., Great Britain, Sweden, Norway, Finland, Denmark, Germany, Austria, the Netherlands, Belgium, and Switzerland.
Accepted by Nearly 86,000 merchants around the world — including Kmart, Target, and Sephora More than 400,000 merchants around the world, including Etsy, Macy’s, Sephora, and Lululemon.
  • Pay-in-four model. (With this model, you divide four interest-free payments over six weeks, with the first payment due when you make the purchase.)
  • Pay in 4: Allows you to split up your total balance into four equal payments to be paid automatically every two weeks, interest-free. The first payment is due at checkout.
  • Pay Now: Pay the total amount upfront either online or in-store using the mobile app.
  • Pay in 30 Days: Pay nothing upfront. Get your purchase now, then pay the full balance in 30 days, interest-free.
  • Pay Over Time: Ideal for larger purchases, Pay Over Time allows you to break up big balances into smaller installments to be paid over 6–24 months. Interest rates range from 0–29.99%.
Rescheduled payments Allowed but with certain stipulations Up to 14 days once per order
Credit limits  Starts with a limit of $600 No predefined spending limit
Fees Late fees of up to $8 Late fees of up to $7
Soft credit check or hard credit check Afterpay runs soft credit checks for new customers when they first sign up
  • Do not do hard credit checks
  • Klarna runs soft credit checks to get a sense of your personal finance history and determine whether you are eligible for a short-term loan. A soft credit check provides enough information to give the BNPL services a sense of your creditworthiness without penalizing your credit score with a hard inquiry.

How to Sign Up for Afterpay

You can sign up for Afterpay using the Afterpay app, at afterpay.com, or by choosing Afterpay as your payment method at checkout.

  1. Go to the Afterpay website or download the app.
  2. Enter your email address, phone number, date of birth, valid ID, and a credit or debit card, or bank account number.
  3. Complete sign-up.

How to Sign Up for Karna

You can sign up for Klarna using the Klarna app, at klarna.com, or selecting Klarna as your payment method at a participating store.


  1. Go to the Klarna website, download the app, or click Klarna as the payment method when making a purchase.
  2. Provide the necessary personal information.
  3. Complete sign-up.

How to Use Buy Now Pay Later Responsibly

BNPL services allow consumers to make purchases online or in-store by breaking up larger ticket items into a small number of fixed installment payments. BNPL is attractive to consumers because purchases are typically interest-free and don’t involve many of the fees that come with bank accounts and credit cards.

Emarketer predicts a 12.3% growth in total BNPL spending in the U.S. for 2024. BNPL’s popularity has skyrocketed recently, and it’s easy to see why. These payment plans open up new possibilities, especially for those who haven’t had much access to traditional banking. But, as with anything, there are risks to keep an eye on.

Advantages Disadvantages
You get easier access to goods and services It is easy to overspend
Customers pay low-to-no fees and interest charges on their payment plan There are potential fees or interest charges and credit score damage
You can maintain and build your credit score Buy Now Pay Later can be difficult to manage

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When it comes to Afterpay vs. Klarna, each BNPL provider offers unique strengths. Afterpay’s simple pay-in-four model and Klarna’s flexible payment options give shoppers more control over their finances. To get more out of your BNPL payments, check out Cushion. It’s a smart way to keep your BNPL payments organized and work towards a healthier financial future.

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Does Afterpay and Klarna build credit?

No, Afterpay and Klarna don’t directly build your credit score–they only perform a soft credit check to verify your reliability, which doesn’t necessarily impact your score. These checks are mainly for internal use to ensure you have a history of paying bills on time and don’t contribute to your credit history in the way that loans or credit card payments might. If you want to build your credit score, you can use the Cushion app, which can use your BNPL payments to build your credit.

Are Klarna and Afterpay the same?

No, Klarna is not the same as Afterpay. While both BNPL services allow customers to make purchases and spread the cost over several payments, they are separate companies and may have different terms and conditions, fees, and payment options. It’s always a good idea to compare the offerings of different BNPL services and choose the one that best suits your needs.

Can you use Afterpay and Klarna at the same time?

Yes, you can use Afterpay and Klarna at the same time, as long as the retailer you are purchasing from accepts both payment methods. However, it’s important to note that using multiple BNPL services can increase your overall debt and make it more difficult to manage your payments. It’s always a good idea to carefully consider your financial situation and choose the payment method that works best for you.

Recommended article: What Credit Score Do You Need for a Target Credit Card?

Last Updated on July 07, 2024
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Disclaimer: The information provided in this website is for educational purposes only and should not be considered as financial advice. Consult with a financial professional for personalized guidance regarding your specific situation.
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