Recently these payment solutions companies have hit the headlines for growing concerns of people getting into debt with the ease of spending at the click of a button. New research suggests that OVER two million shoppers have damaged their credit scores using “buy now pay later schemes.”
Firstly, they state that the terms can differ between e-stores, and for the complete correct terms then the respective e-stores must be read. So, whilst you may use it for boohoo the terms may be different for I Saw It First, not exactly very clear for consumers.
Klarna advertises that there is no interest or fees ever, this is not true for overdue accounts, common sense may prevail on that one but for inexperienced teens it might not seem quite so obvious. This is also not true for all borrowing methods and the interest clause is quite confusing and unclear on when interest applies and when it does not. There is also a clause on minimum charges which is £1 per month?! Late payment fee is up to £12 per month and if you sign up to paper statements that’s another £1.49 per statement. Klarna also state that they may employ a debt collection agency to recover any outstanding debt and the reasonable costs incurred may be passed on. Klarna also are clear in the terms that legal action may be taken, it can affect your credit rating, they may make an application to have you declared bankrupt and order a sale on your property. This highlights the need to stay in control when using these types of lenders.