Klarna, which is based in Stockholm, says its global default rates are less than 1 percent. In the United States, more than a third of customers repay loans early.
Kelsey Greco made her first pay-later purchase about four years ago to buy a mattress. Paying $1,200 in cash would have been difficult, and putting the purchase on a credit card seemed unwise. So she got a 12-month, interest-free loan from Affirm.
Since then, Ms. Greco, 30, has used Affirm regularly, including for a Dyson hair tool and car brakes. Some of the loans charged interest, but she said that even then she preferred this form of borrowing because it was clear how much she would pay and when.
“With a credit card, you can swipe it all day long and be like, ‘Wait, what did I just get myself into?’” Ms. Greco, a Denver resident, said. “Whereas with Affirm, it’s giving you these clear-cut numbers where you can see, ‘OK, this makes sense,’ or this doesn’t make sense.”
Ms. Greco, who was introduced to The Times by Affirm, said pay-later loans helped her avoid credit card debt, with which she previously had trouble.
Originally posted 2023-12-20 17:24:46.