Klarna axes free credit card as customers say 'no way I'm paying' new £4.99 fee

Klarna axes free credit card as customers say 'no way I'm paying' new £4.99 fee Klarna credit cards can be used at any store which accepts Visa, whereas a normal account with Klarna - the Swedish financial technology - only works with specific partners Klarna customers have been left unimpressed after the buy now, pay later firm announced it is axing the free version of its credit card. It means all customers will have to pay a minimum £4.99 monthly membership fee to use its basic credit card after its free version is withdrawn on November 13 in the UK. Klarna offers several different credit card memberships, with the most expensive costing £44.99 a month. Klarna credit cards can be used at any store which accepts Visa, whereas a normal Klarna account only works with specific partners. The buy now, pay later firm has started contacting customers about the changes, which are part of a revamp of Klarna's existing membership programme. One person said: "I’m in UK and just received email about this. I am out. No way I’m paying a monthly subscription just to use a credit card." Another said: "It’s changing from the 13th of November will need the £4.99 membership to continue to use the card. So yeah will just pay the balance I have and close the card." Klarna told The Sun that the vast majority of customers use Klarna at the checkout when it is available as an option, and says this service does not require a paid-for membership. A spokesperson said: "This change is part of a revamp of our memberships programme, which includes a complete removal of service fees and a big boost to our cashback offering. "With service fees gone, a membership works out cheaper for some customers. The debit card is still free for everyone, and so are Klarna's flexible payment options at the 1.2 million merchants that offer us at checkout. "The value of a Klarna membership is far more than it costs at every tier, and at as low as 99p for the first month for new members we’re making it easy for people to try it out and see the value for themselves." Buy now, pay later changes New buy now, pay later rules were introduced in July this year which gives greater protection for millions of consumers. Buy now, pay later allows people to spread the cost of purchases, normally interest-free, over a set period of time. But the sector has come under fire in recent years over its previous lack of regulation, and the consequential risk of shoppers ending up with unmanageable debt if they don’t keep up their payment plan. The changes mean buy now, pay later is now under FCA regulation. This means firms must be authorised by the regulator in order to offer buy now, pay later agreements. They will have six months from July to apply for full FCA authorisation. Under the changes, buy now, pay later firms must conduct proportionate credit and affordability checks and anyone using its service will also get clear, upfront details about their agreement. Even though most BNPL lenders do not charge interest, you can be charged late fees if you miss a payment. Missed payments can also be reported to credit reference agencies, which can have a negative impact on your credit score. If someone finds themselves in financial difficulty and they cannot make their payments, then firms will also now have provide greater support, including signposting them to free debt advice. Should things go wrong, and someone is treated unfairly, then customers can now raise a complaint to the Financial Ombudsman Service (FOS).