Klarna Canada – 2023 Review: Everything You Need to Know

By Nick Robert

Klarna Canada is a new way to make purchases – buy now and pay later. In a time with rising costs due to inflation, Klarna Canada can help by giving you more flexible payment options. But how can Klarna Canada offer interest-free purchases and no fees?

Does this sound too good to be true? In this post, I will break down what Klarna Canada is, how it works, and everything else you need to know. Let’s dive in!

Klarna Canada

How does Klarna work in Canada?

Klarna is short for Klarna Bank AB, a Swedish fintech company that offers online financial services for online payments to vendors. The company was started to make it easier and more affordable for everyone to shop online by providing flexible payment options to online shoppers.

Klarna has expanded since its inception, and they now offer flexible payment options in Canada for online or in-person retail shopping. They did market research and discovered that over half of Canadian consumers wanted more flexible payment options. With Klarna, you can easily choose an interest-free payment option with no upfront fees. Klarna has been operating in Canada since February 2022.

By using Klarna, you split your payment into four installments. The first installment of 25% is due at checkout or when you receive the product, and then the remaining three installments of 25% each are billed to your credit card or bank account every two weeks until paid in full.

Click here to get started with Klarna today

How does Buy Now Pay Later (BNPL) work?

Buy now, pay later is a less well-known payment option – most stores require payment at the time of purchase or even require a down payment before placing a large order. Traditional buy now pay later services would require a hard credit check to determine if they can extend you credit, plus charge you high interest on your purchases and possible fees.

Klarna is changing the way buy now pay later works as they do not do a hard credit check, so there is no impact on your credit score. They do a soft credit check when you go to pay. Soft credit checks do not impact your credit score but provide insight into your credit history. They also have no fees, and all purchases are interest-free through their pay-in-4 service.

What is Pay in 4 from Klarna?

Klarna allows you to split your payments into four instalments, due every two weeks on purchases through the Klarna app and at select retailers. They do this by billing your credit card in 4 installments (pay in 4) based on your agreed-upon terms at the time of purchase. The first instalment is due at the sale (or when you receive the product), and the remaining three installments are paid to Klarna every two weeks through your credit or debit card.

This payment option is available for all purchases made through the Klarna app and at select in-person retailers. Here is a complete list of the stores that accept Klarna’s pay in 4.

How do you qualify to use Klarna Canada?

Klarna does not require a traditional application to use their pay in 4 service. Instead of doing one hard credit check that hurts your credit score, they do a soft credit check at every purchase to determine if you qualify for buy now pay later. The information from the soft credit check will give Klarna guidance on how much credit they are willing to extend to you.

This makes Klarna much more flexible than other buy-now-pay-later services. Most other services require a hard credit check and will only extend you small amounts of credit at a high-interest rate.

Who can use Klarna?

They do have general requirements to use Klarna Canada:

  • Be 18 years of age

  • Have a positive credit history

  • Do not have too much debt & unpaid purchases

They use this criterion to determine if they will extend you more credit. If you have too much debt, you may need to remove some items from your cart to qualify for the pay in 4 option.

What happens if I miss payments?

Klarna states on its website that Klarna will not charge interest or fees if all payments are made on time. However, what happens if you can’t make that payment on time?

On the first missed payment, Klarna will notify you that the payment failed and try to bill your credit or debit card again in two days. Klarna will add the missed payment to your next installment in two weeks, if that payment also fails. If you fail to make the payments, they will send your unpaid debts to a collection agency, and your credit score will take a hit.

If you are in a situation where you know you will not be able to make the payments, it is best to reach out to Klarna directly to try to arrange a payment structure. This will help you keep your credit score higher.

Where can I use Klarna?

You can use Klarna’s services at many partnered stores in Canada, for any purchases made through the Klarna app, and any online stores in Canada that accept prepaid cards. You can visit the complete list of partnered stores in Canada here.

This means you can use Klarna almost everywhere. But where can you not use Klarna in Canada?

  • To purchase gift cards

  • Utility bills

  • Rent payments

  • Alcohol or drug purchases

  • Government bills (like income tax)

  • Uber and similar ride-share services

Is Klarna Canada a credit card?

Klarna is not a credit card – you need a credit or debit card to use Klarna in Canada. They are a buy now pay later service. They extend you credit, and Klarna charges the instalments due to your linked credit or debit card. Click here for a list of the best credit cards in Canada, the best cash-back credit cards, and the best student credit cards.

Having a credit card can help you qualify to use Klarna, though. You are building your credit each month by having a credit card and paying it off in full. Your credit score will help Klarna determine your creditworthiness and influence how much credit will extend to you. This is why it is vital to have a strong credit score.

How to use the Klarna App

It is simple and easy to use the Klarna app. Click here to visit the official Klarna website to get the Klarna app, or scan the QR code below.

Klarna App QR code

Is it really interest free?

Klarna is interest & fee free if you make your payments on the scheduled due dates. If you do not make your payments on the due date, Klarna does not charge interest. First, they will try charging you again in two days. They will add your overdue payment to the next instalment if this is unsuccessful. If this is unsuccessful, they will work with collection agencies to collect the money you owe, negatively impacting your credit score.

What are people saying about Klarna Canada?

Buy now pay later services are revolutionizing how Canadians make purchases. Klarna is giving Canadians flexibility in managing their expenses. From user reviews, I have noticed a trend of Canadians needing help making payments on the instalment due dates. So while it has provided more flexibility, you still need to be financially responsible and ensure you can pay the due instalments.

Every Canadian should determine if Klarna is the right solution for their spending habits. For some, this will lead to overcommitting and purchasing unnecessary items. If used responsibly, this is a great tool to help you manage your cash flow. If not used responsibly, you can get yourself into more debt. Learn more about personal finance to help set yourself up for success.

Nick Robert

About the Author

Nick Robert is the founder and creator of Nickrobert.com. I created this website to educate Canadians about everything related to personal finance. As a Chartered Professional Accountant & Chartered Accountant, I have worked with many Canadians to achieve their personal finance goals.

To contact me, you can visit my contact page to email me directly, or you can visit and participate in my subreddit. Let me know about any topics you would like me to cover. If you are interested in guest posting on this website, message me through the contact page.

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