Credit cards and Klarna debt

What is a credit card?

A credit card is a payment card which lets you borrow money from a bank or financial institution to buy things and pay the money back later. You would either pay it back all at once or in smaller instalments. Here are a few useful things to keep in mind.

• Your credit card has a limit, which is the maximum amount you can spend. This limit depends on your situation. Every time you buy something, the cost gets added to your account, and the total you owe is called your balance
• Each month, your credit card provider will send you a statement. This shows your spending, any interest or charges, the total balance you owe, your minimum payment amount, the due date, and payment details. Make sure to check it carefully and report any issues right away

 

What happens if I can’t pay my credit card bill?

If you can’t pay your credit card bill, it’s important not to ignore it.

Missing payments can lead to late fees and interest charges, which can quickly make your debt harder to manage. The credit card company might also report missed payments to credit agencies, which could affect your credit score.

If you miss three or more payments, your credit card company might put your account into default. This means they can take action to get the money back or hand your debt over to a collection agency.

By law, you have to be given 14 days to pay before any further steps are put in place. If you still don’t pay after this time, you could be taken to court. Scottish charity National Debtline has more information about what will happen if things progress to court.

Creditors can take a few different actions to get their money back. One way of doing this is by arresting your earnings, which is when your employer takes money from your wages to pay the debt. Creditors could also do something called bank arrestment, this is when part of your bank balance is frozen to pay off what you owe.

 

What is Klarna?

Klarna is a European bank service, but they are best known for their “buy now pay later” (BNPL) scheme. This has become a really popular service in the last few years, with many people using it to buy things online such as clothes and pay for them later. There are four main ways that you can use this.

• You can use the “pay now” feature, where you basically pay for what you’re buying upfront as if you were using your regular debit card. As you would be paying upfront, there is no credit check attached to this feature
• The “pay in three” feature allows you to spread the cost of what you’re buying into three interest-free instalments. Once you have selected this option, these payment instalments are taken from your account automatically every 30 days. A soft credit check will be performed when you use this feature, and this check doesn’t impact your credit score
• The “pay in 30 days” option allows you to buy something and then pay for it 30 days after. A soft credit check will also be performed when you use this feature, and this check also doesn’t impact your credit score
• “Klarna Financing” is a more long-term pay later feature. This allows you to pay for what you’ve bought in several fixed monthly payments. You pay the amount back between 6 and 36 months. Your first payment will be due one month after the shop which you have made the purchase from processes your order. You would then pay on that same date each month until your statement is fully paid. Keep in mind that a hard credit check is always used when you sign up for this feature, and this can impact your credit score

It’s a good idea to think about how you will pay back your Klarna payments before you sign up to any of the features above. It also might be useful to think about how any late payments will impact your credit score.

 

What happens if I can’t pay Klarna back?

Remember that although these payment methods can be really useful, Klarna will add on fees for late payments. Find out what happens if you can’t pay Klarna back on time.

If your payment is not registered by the last reminder due date that Klarna sends you, they will organise for debt collectors to deal with the case. Find out why your Klarna payment might be in debt collection.

If your case has been passed to debt collectors, they might reach out to you in writing, by phone, or even in person to talk about paying what you owe. If you’re still unable to pay, Klarna or the debt collector could take legal action. The court could order you to repay the debt along with interest and extra costs. At this point, you could risk losing your possessions or even your home. It’s really important to take action and get professional advice as soon as you realize you can’t pay.

Scottish charity, National Debtline has more information about what will happen if things progress to court.

 

What do I do if I am in debt to Klarna or can’t pay my credit card bill?

If you’re having trouble paying what you owe to Klarna or covering your credit card bills, don’t panic. There are a few things you can try to make things easier. Remember that the sooner you take action, the better chance you have of avoiding bigger problems down the line.

Here are a few options to help you out.

 

Snooze your Klarna payments

If you have been using the “pay in three” or “pay in 30-days” options, you can hit the ‘snooze’ button on the Klarna app to delay your payment by 10 extra days. To do this, install the Klarna app, log into your account, head to ‘Payment options’ and select ‘Snooze’. This will give you an extra 10 days to pay without any interest or extra fees.

Keep in mind, you can only snooze once per order, so if you need more time, be sure to reach out to Klarna before those 10 days are up.

 

Get in touch with Klarna

If you’re really struggling, don’t be afraid to reach out to Klarna directly, as they may be open to renegotiating your payment plan. You can contact them via phone, email, or live chat.

Be upfront about your situation. They might even give you more time to pay or reduce the interest on your payments. Letting them know what’s going on can help you avoid having your debt sent to collections.

 

Get in touch with your credit card company

If you are struggling to pay your credit card bill, it’s a good idea to get in touch with your credit card company as soon as possible. This will let them know that you’re not ignoring the payments on purpose.

Being honest with your credit card company about any issues is a good idea. If you tell them how things are affecting you, they might offer you lower repayments or even freeze interest for a while.

 

Get professional help

If things still don’t resolve after talking to Klarna or your credit card provider, it’s a good idea to contact a debt counselling service or charity.

They can help you set up a budget plan and work out a payment schedule that fits you and your finances. They’ll also explain other options available to help you deal with your debt in a manageable way. Here is more information about dealing with your creditors.

 

Free Scottish debt advice services

Money Talk Team – Citizens Advice Scotland (CAS)

Freephone: 0800 028 1456

Check opening times with your local Citizens Advice office. Find your local Citizens Advice office.

Find out more from the Money Talk Team website.

National Debtline

Open Monday to Friday 9am to 8pm. Saturday 9.30am to 1pm.

Freephone: 0808 808 4000

Online chat

 

Find out more from the National Debtline website.

Advice Direct Scotland

Freephone: 0808 196 2316

Online chat

Open Monday to Friday 9am to 5pm.

Find out more from the Advice Direct Scotland website.

 

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