Question 1

Is Klarna free?

Accepted Answer

Klarna can be free if you make all your payments on time. Their 'Pay in 4' and 'Pay in 30' options don't charge interest for on-time payments. However, late payments incur fees of £5 each (maximum 2 per purchase, capped at 25% of your order value). If you extend your payment plan, you could face APR of up to 25.9%.

Question 2

What happens if I miss a BNPL payment?

Accepted Answer

Missing a BNPL payment typically results in late fees ranging from £5-£8 per missed payment, depending on the provider. Your account may be suspended, preventing future purchases. Repeated missed payments can be reported to credit agencies, potentially affecting your credit score. Some providers may also pass your debt to collection agencies.

Question 3

Is BNPL bad for my credit score?

Accepted Answer

BNPL can affect your credit score in several ways. Many providers now report to credit agencies, so late payments can hurt your score. Multiple BNPL applications may trigger hard credit checks. On the positive side, consistently paying on time can help build your credit history.

Question 4

How do BNPL fees compare to credit cards?

Accepted Answer

If you pay on time, BNPL is usually cheaper than credit cards since there's no interest. However, if you miss payments, BNPL fees can quickly exceed what you'd pay in credit card interest. For example, two late fees of £5-£6 on a £100 purchase equals 10-12% of the purchase price in just 6 weeks — equivalent to a much higher APR than most credit cards.

Question 5

Which BNPL provider has the lowest fees?

Accepted Answer

Affirm doesn't charge late fees but may charge interest (0-36% APR depending on your credit). Afterpay (known as ClearPay in the UK) caps their late fees at 25% of the order value or £24, whichever is lower. Klarna charges £5 per late payment (max 2, each capped at 25% of order). Zip charges £6 per late payment.

Question 6

Can I use multiple BNPL services at once?

Accepted Answer

While technically possible, using multiple BNPL services simultaneously is risky. It can lead to overlapping payment dates, making it harder to track what you owe. Each provider conducts affordability checks independently, so they may not see your full financial picture.

Question 7

Should I use BNPL or a credit card?

Accepted Answer

Use BNPL when you're confident you'll pay on time, you want to avoid interest, and you're making a one-time purchase. Use a credit card when you might need payment flexibility, you want purchase protection, or you're building credit history. For larger purchases you'll pay off over several months, a 0% purchase credit card is often the better choice.