Nobody visits a motorway service station for fun—but our latest survey shows that travelers are hoping for better than overpriced snacks, poor facilities, and unclean restrooms.

Four years after our last motorway services review, the feedback continues to paint a bleak picture of an outdated and poorly maintained network—one still plagued by hygiene issues and a lack of quality services.

Even though your motorway route may limit your options, our survey—based on ratings from thousands of members—shows that stopping just one or two junctions earlier or later can make a big difference in what you find when you pull in.

Gloucester Services Tops the List in 2025

Once again, Gloucester Services on the M5, operated by the Westmorland Family, has been ranked as the best motorway service station in the UK. It earned five stars in nearly every category, including cleanliness, facilities, food quality, and outdoor space.

All three Westmorland-operated services received high ratings, making them worth going a few extra miles.

Avoid Southwaite, Choose Tebay Instead

Take the M6 as an example. If you stop at Southwaite Moto Services (junctions 41–42), you’ll find low-quality shops, subpar food outlets, and possibly unclean toilets—scoring only two out of five stars in key categories.

But just two junctions earlier (38–39), you can visit Tebay Services, also run by Westmorland, which scored a stellar 77%. Tebay offers clean restrooms, scenic open spaces, and freshly prepared meals. You’ll even find a top-notch farm shop with local gifts and healthy snacks—perfect for the rest of your journey.

What Is the Best Motorway Service Station in the UK?

Gloucester Services has once again claimed the title of the best motorway service station in the UK for 2025. Operated by the Westmorland Family, three of their sites consistently top our survey rankings thanks to their exceptional cleanliness, excellent facilities, and pleasant open spaces that travelers actually enjoy spending time in.

The Westmorland Family Services group is the only provider to be named a Which? Recommended Provider, and their standout locations include Gloucester Services, Tebay Services, and Cairn Lodge Services.

Top-Rated Motorway Services in the UK (2025)

1. Gloucester Services – Best Overall

• Location: M5

• Operated by: Westmorland Family

• Highlights: Five-star cleanliness, fresh food, scenic outdoor areas, and top-tier customer satisfaction.

2. Tebay Services – Runner-Up

• Location: M6 (Junctions 38–39)

• Operated by: Westmorland Family

• Known for: Homemade meals, local produce, clean restrooms, and a beautiful rural setting.

3. Rugby Services – Best from a National Brand

• Location: M6 (Junction 1)

• Operated by: Moto

• Standout features: Fast and plentiful EV charging, large dog walking area, modern facilities.

4. Leeds Skelton Lake Services – High Score from Extra

• Location: M1 (Junction 45)

• Operated by: Extra

• Key highlights: Clean amenities, numerous EV chargers, and the RSPB viewing platform over Skelton Lake.

These results mark a significant leap forward for national operators like Moto and Extra, with both Rugby and Leeds Skelton Lake earning praise for clean facilities, EV infrastructure, and innovative outdoor features.

The post Best Motorway Services in the UK for 2025 Ranked by Travelers appeared first on Hazoo.

Only 7% of easy access savings accounts have seen interest rate cuts since the Bank of England (BoE) reduced its base rate on May 8, according to an analysis.

This is significantly lower than the number of rate cuts recorded after the base rate was previously reduced in November 2024—the last time we conducted this analysis.

Some notable cuts were made by smaller providers. For example, Chip, which previously offered a market-leading easy access rate, slashed it from 4.76% AER to just 3.3%.

With more savings account rates likely to fall in the coming days and weeks, here we explain which accounts have been most affected—and what you can do to protect your money.

What’s happening to easy access accounts?

Base rate cuts are significant for savers, as banks typically respond by lowering the interest paid on savings accounts. Variable-rate products, like easy access accounts, are often the first to be affected.

We used Moneyfacts data to analyze all easy access account rates on April 30 and again on May 13—just one week before and five days after the BoE cut its rate from 4.5% to 4.25%.

We found that 7% of all easy access accounts had reduced their rates. While not a massive figure, most of these cuts came from smaller banks and building societies. In some cases, the cuts were steep—over a full percentage point.

Chip made the most dramatic reductions. The app-only provider lowered the rate on its Easy Access Saver—which limits customers to three withdrawals a year before penalties—from 4.76% AER to 3.3%, a drop of 1.43 points. The unlimited withdrawal version also fell sharply, dropping from 4.6% to 3.24% AER, a 1.36-point decrease.

OakNorth Bank also made a significant cut, reducing the rate on its Easy Access Savings Account from 3.25% AER to 2%, a 1.25-point drop.

Other digital banks made smaller cuts. Atom Bank reduced its unlimited access rate by 0.35 points, while Zopa and Tandem lowered their easy access rates by 0.25 points.

Among high street names, Barclays was the only one to reduce easy access rates, cutting returns on both its Everyday Saver and Rainy Day Saver by 0.1 and 0.26 points respectively.

Cause for optimism—or time to switch?

The proportion of easy access accounts hit by cuts after May’s base rate reduction is significantly lower than in November 2024, when we found that 19% of accounts had their rates reduced. This time, it’s just 7%.

Moneyfacts data shows that the average easy access rate slightly increased from 2.76% AER in April to 2.78% in May 2025. Our latest analysis also found that a handful of accounts have actually increased their rates since the May 8 cut—including those from Hampshire Trust Bank, Leeds Building Society, and West Brom Building Society.

However, any optimism should be tempered with caution. More providers are likely to reduce rates in the coming weeks. Savers should consider their next steps now.

Your first option is to switch to another easy access account offering a higher rate. Alternatively, opening a fixed-term savings account could lock in a guaranteed rate for the duration of the term—regardless of what happens elsewhere in the market.

Will savings rates fall further?

Savings rates surged to record highs after the BoE raised the base rate 14 times between December 2021 and August 2023.

When the base rate was first cut in August last year, average savings rates began to fall. Similar trends followed rate changes announced in November 2024 and February 2025.

As more providers respond to the shifting market, it’s likely that rates will continue to decline.

However, today’s rates remain significantly higher than they were two years ago, when the average easy access account offered just 2.06% AER. In May 2021, that figure was as low as 0.16% AER.

It’s also important to remember that the base rate isn’t the only factor influencing savings rates. Product demand and competition from other providers can also push rates up or down.

3 ways to maximise your savings when interest rates fall

Savvy savers should find it straightforward to hunt down the best rates. But how can you ensure your savings are working as hard as possible?

1. Lock in your savings for longer
It might seem counterintuitive when shorter-term fixed-rate accounts are currently offering better rates, but the best available one-year bond today might no longer exist when it matures.
If you don’t need access to your funds soon, consider a two- to five-year account instead. This could save you from settling for a lower rate later.

2. Make the most of your tax-free Isa allowance
There’s a limit to how much interest you can earn tax-free in standard savings accounts (£1,000 for basic-rate taxpayers, £500 for higher-rate taxpayers, and no allowance for additional-rate taxpayers). ISAs let you invest up to £20,000 per year, tax-free.

3. Sign up to a savings platform
Platforms like Raisin and Hargreaves Lansdown can help you find market-leading savings accounts. Once registered, you only need to remember one login.

Most platforms notify you when a bond matures to help prevent your savings from languishing in a low-interest account. But remember, savings platforms don’t cover the entire market—so you might miss the best rate from a provider not included on the platform.

The post Is it time to fix your savings? appeared first on Hazoo.

NFU Mutual Car Insurance

What we like: NFU Mutual doesn’t charge an admin fee or interest if you want to pay monthly, and motor legal protection is included as standard.

LV Car Insurance

What we like: Of all the policies we rated, LV’s policy had the least amount of “gaps” in coverage, receiving three stars or more in 86% of the policy areas we assessed. It also provides no-claims discount protection against an unlimited number of claims.

Aviva Car Insurance

What we like: Aviva customers were among the most likely to say their claims were handled with understanding. If your car is damaged by a pothole, you can claim without affecting your no-claims discount.

Why is car insurance so expensive?

According to the latest figures from the Association of British Insurers (ABI), the average private motor insurance premium was £539 (January–March).

This is down 7% from the average premium of £635 at the start of 2024.

However, these recent drops follow several cost increases that the ABI attributes to higher vehicle repair costs, increased thefts, and rising prices of replacement vehicles.

ABI data shows insurers paid out £11.7 billion in motor insurance claims in 2024 — a 17% rise compared to the previous year’s claim costs.

Are the best car insurance providers always the most expensive?

Our research reveals significant differences in service standards and levels of cover across companies and policies.

But that doesn’t mean you have to pay a premium for quality coverage — nor does a higher price necessarily mean you’re getting the best.

Insurers quote you an individual price based on how they assess your risk. If an insurer considers you high risk, or simply doesn’t want to compete for your custom, their policy could be more expensive than others offering better cover.

What is the average monthly cost of car insurance?

According to the ABI, the average annual premium paid by drivers between January and March 2025 was £589 — which equates to about £49 per month.

Your excess, vehicle type, and age can increase your premium.

Keep in mind that paying monthly instead of annually can cost you more. In some cases, insurers charge over 30% interest — similar to being in a bank overdraft.

What age group has the cheapest car insurance?

Your 50s and 60s should be among your cheapest years for car insurance — as long as you pick the right policy.

However, costs can start rising again as you get older, and some insurers may refuse to cover you entirely.

There are specialist policies for over-50s, but standard insurers may still offer better prices. Make the most of your no-claims discount — which can be eroded by increasing premiums — and check if your new insurer will honour it when switching.

Can car insurance be transferred to a new car?

Yes. Your policy can be transferred to your new car, even if you’re midway through a 12-month term. Once the transfer is complete, your new car will be covered in the same way as the previous one.

Some providers may charge an admin fee to update your details. These changes should include your car’s make, model, and mileage. Your new car may affect your insurance premium.

Your provider will need to know the transfer date of the policy. The best time to contact them is after you’ve found out when you’ll be picking up the car from the dealership or seller. That way, your insurance will be active on the day you drive it home.

Can I drive other vehicles under my policy?

If you’re added to someone else’s policy as a named driver, you’ll be covered to drive their car up to the policy’s level of cover.

Your policy may also include driving other cars (DOC) cover — even if you’re not named on the other person’s policy.

However, DOC usually provides third-party cover only and is often valid only in emergencies.

Can I sell my car without insurance?

No. You can’t legally transfer ownership without car insurance.

Selling a car without insurance means the buyer can’t legally drive it and risks fines or seizure of the vehicle.

Also, buyers may be hesitant to purchase an uninsured car, as it can negatively impact their own insurance policy.

Even if your car isn’t being used and you’ve declared it off the road (SORN — Statutory Off Road Notification), it must still be insured and taxed to allow test drives or to be moved.

What happens if my insurer goes bankrupt?

UK banking and insurance customers are protected by the Financial Services Compensation Scheme (FSCS) if their insurer goes bankrupt. This means:

• If you’re entitled to a refund on your premium, FSCS will return 90% of the amount owed.

• If someone makes a claim against you that’s covered by your policy, FSCS will pay it in full.

• If you have an unpaid claim your insurer can no longer pay, FSCS will pay 90% of the claim.

The post Best Car Insurance Companies in the UK for 2025 appeared first on Hazoo.

Broadband is now a vital part of everyday life, but our research shows that millions of customers are unhappy with the value they’re getting for their money. Despite this, many people are not taking advantage of the competitive and affordable deals available. Over a third of broadband users are out of contract, meaning they’re likely on expensive standard tariffs — and paying more each year.

Our analysis shows that if you’re paying more than £30 a month, your broadband is probably overpriced.

Why Most People Shouldn’t Pay Over £30 for Broadband

Many customers are still on outdated part-fibre deals. However, recent infrastructure upgrades mean full fibre is now available in most areas — offering better reliability and significantly faster speeds.

Full fibre is now the gold standard. It’s no longer just for a small minority; it’s available in about 75% of UK premises. Even better, prices are falling. According to Ofcom, advertised promotional prices for the fastest deals actually dropped last year. Meanwhile, prices for existing customers went up, as most major providers raise their rates each spring.

We analysed full fibre deals currently listed on the some websites. Many widely available deals, such as those from Switch Broadband, offer at least 70Mbps (the UK average) for £30 or less per month — even after factoring in upfront fees, discounts, and future price hikes.

What If Full Fibre Isn’t Available in My Area?

Around one in four premises — mostly outside major cities — still can’t access full fibre. But that doesn’t mean you have to pay more than £30 a month.

Our analysis of part-fibre deals shows it’s still possible to get average speeds around 70Mbps (typically between 61Mbps and 74Mbps) for less than £30 a month.

Even Cheaper Deals Exist in Some Areas

Our research focused on providers using the Openreach and Virgin Media networks, which are widely available across England.

However, some regions offer even better prices. For example, if you live in parts of London or Hull, providers like Community Fibre and KCOM often have more affordable deals than the major brands.

Alternative networks (known as “altnets”) also operate across the UK. If you’re lucky, you might have access to services from Hyperoptic or CityFibre — used by Sky, TalkTalk, Vodafone, and Zen Internet in some locations — or other smaller local providers.

Switching Providers Is Easy — and Saves Money

Switching providers is one of the best ways to make your money work harder. Our research consistently shows it’s the most effective way to save — with average yearly savings of £105. If you’re with one of the Big Four providers, you could save even more.

Your new provider will handle the entire switch, and getting started is quick and simple.

The post Why You Shouldn’t Be Paying More Than £30 a Month for Broadband appeared first on Hazoo.

Buying an electric shaver might seem simple, but to get the best results, there are several important features and factors to consider. Based on our extensive testing process, here’s what you should know before making your purchase.

How We Test Shavers – Why You Can Trust Our Advice

In a world full of “experts,” we stand by transparency. We buy every product we test — no brand pays to be included or influences our reviews. Every electric shaver is tested over six weeks by a diverse panel of real users with different hair types and shaving habits. This ensures a fair, real-world comparison — not just one person’s opinion.

Key Features to Consider When Buying an Electric Shaver

1. Shaving Performance

• Close Shave: Look for a model that can give a smooth finish on both short (1-day) and slightly longer (3-day) stubble. Top-rated shavers leave no patches or irritation behind.

• Maneuverability: A good shaver should work well around tricky areas like the chin, upper lip, and sideburns. Some models excel at this, while others struggle to deliver precision.

• Skin Irritation: Shavers vary in how gentle they are on the skin. Some can cause redness or ingrown hairs, especially with sensitive skin.

2. Noise Level

• Some models produce a quiet hum, while others are so loud they could wake the house. Consider how important low noise is for your morning routine.

3. Ease of Cleaning

• Most electric shavers are easy to clean with running water and a small brush. Expensive models may come with self-cleaning stations, but many users find these unnecessary and bulky.

• Tip: You can save money by choosing a model without a cleaning dock.

4. Durability

• Our durability tests include dropping the shaver from head height five times. Robust models withstand this without damage.

5. Ease of Use

• We test with a Cambridge Simulation Glove to evaluate how easy a shaver is to use for those with limited hand movement. Good models are comfortable and accessible even for people with arthritis or mobility issues.

Foil vs Rotary: Which Shaver Head Is Right for You?

Foil Shavers

• Feature straight heads with blades under a thin foil.

• Ideal for daily or every-other-day shaving.

• Offer a closer, faster shave on short hair and better precision around facial features.

• Preferred by most users in our tests (76%).

Rotary Shavers

• Use three circular rotating heads to lift and cut hair.

• Better for those who shave less frequently or have longer facial hair (22% of users).

• More effective for capturing longer hairs, but generally less precise.

Maintenance Tips

Cleaning

• Most shavers can be cleaned by rinsing the head and brushing the blades.

• Self-cleaning stations are convenient but often expensive and bulky.

Head Replacement

• Manufacturers usually recommend replacing shaving heads every 18 months.

• Important: Always check the cost of replacement parts before purchasing a shaver.

Money-Saving Tip: Sharpen Your Rotary Blades

• If you own a rotary shaver and a sharpening stone, you may be able to sharpen the blades yourself, extending the life of your device.

How to Get the Best Value

• Shop around: Top-rated shavers are often available at a discount somewhere. You could save over £100 by choosing the right retailer.

• Beware of extras: Travel pouches, wireless chargers, and self-cleaning docks often inflate prices without significantly improving performance.

• Our testers found many of these extras unnecessary and bulky, especially in smaller bathrooms.

Final Tips

• Think about your shaving habits: Do you shave daily or weekly?

• Consider your skin sensitivity and beard type.

• Check how easy the shaver is to clean and maintain.

• Don’t overpay for unnecessary features — focus on what actually improves your shave.

The post Best electric shavers for men appeared first on Hazoo.

1. Not feeding my seedlings
I never grow seedlings without using liquid feed. Switching to peat-free compost can sometimes mean seedlings don’t thrive, and our research shows that liquid feeding is key to growing them well. Use a general-purpose feed as soon as the first true leaves appear, and they’ll grow green and strong.

2. Using seed compost only once
I never use seed compost just once. You can reuse it several times throughout the season to cut costs. And I always recommend using a Best Buy seed compost – even big-name brands have struggled to support plant growth this year, so avoid the ones labeled as Don’t Buy.

3. Sowing most vegetables outdoors
I never sow vegetables outdoors—except for carrots and parsnips. You get more reliable results by sowing in a module tray indoors and transplanting them later. So, if you’re sowing most of your veggies directly outside, you’re wasting money.

4. Cutting my lawn too short
I never cut my lawn too short. Longer grass stays greener and allows flowering plants like daisies to bloom, which helps pollinators. I recommend simply setting your mower to its highest setting.

5. Planting tender plants too early
I never plant tender plants outside before the last frost. These are often sold when nights are still too cold for them—plants like potted flowers and tender vegetables such as courgettes can die from frost. Keep them in a greenhouse or wait until mid-May to buy and plant them.

The post 5 Things I’ll Never Do This Spring as a Gardening Expert appeared first on Hazoo.

With over one million downloads on Google Play and ranking 19th in the Shopping category on the App Store, there’s no doubt that Clearpay is one of the most popular Buy Now Pay Later (BNPL) apps today.

Clearpay gives you a fixed amount of credit to make purchases without interest, while splitting payments into four equal instalments.

We take a look at how Clearpay works and the advantages of using this payment method.

How Clearpay Works

Clearpay partners with many well-known retailers, allowing customers to purchase items online or in-store immediately while deferring payments.

Customers shop online at their preferred retailer and select Clearpay as the payment method at checkout. They then provide payment information (bank or credit card) to either log in or create a Clearpay account.

The cost of your items will be split into four equal payments: the first is paid immediately, and the remaining three are automatically deducted from your account every two weeks.

Some features of Clearpay include:

• No fees. Clearpay is free to use as long as you make payments on time.

• No interest. Clearpay charges no interest on your purchases.

• Automatic payments. The remaining three instalments are automatically withdrawn every two weeks.

• Easy to manage. Purchases are split into four equal payments.

• Immediate order processing. Clearpay pays the full amount upfront to the retailer, so your order is shipped right away.

Fixed Payments

Unlike Klarna and other BNPL providers, Clearpay offers only one type of payment plan. This can make things simpler for users since everyone follows the same structure.

However, Clearpay doesn’t offer a “try before you buy” option like Klarna. This is because Clearpay splits the cost into four equal payments, with the first instalment charged at the time of purchase.

Even if you return the product and receive a refund, payments will continue to be withdrawn until you confirm whether you want to keep the new item.

Automatic Payments

Clearpay uses automatic payments to help customers avoid missing due dates.

However, this means you need to ensure your linked account has enough funds to cover the instalments. Unlike Klarna, Clearpay charges a £6 late fee for missed payments and a second £6 fee if the payment remains unpaid after seven days.

Be aware of this if you decide to use Clearpay.

User-Friendly App

Downloading the Clearpay app, available for iOS and Android, is useful if you plan to use Clearpay regularly. You can browse a comprehensive list of online retailers that accept Clearpay, manage your payments effectively, review your payment plan, and more.

If you have the funds and want to finish your repayment plan earlier, early payments are also possible.

How Much Does Clearpay Cost?

Clearpay is free from interest or other costs unless you don’t have enough funds to cover automatic payments. In that case, a late fee will be charged, and you’ll need to log into your Clearpay account to pay off your balance.

Is Clearpay Safe to Use?

The Afterpay Touch Group, which Clearpay is a member of, has received Level 1 certification from the Payment Card Industry Data Security Standard (PCI DSS). According to the company, your card and personal information are always secure when shopping with Clearpay.

How to Use Clearpay

To create a Clearpay account, you must be at least 18 years old and shop with a retailer that accepts Clearpay. When shopping online, follow these steps:

1. Find a retailer that offers Clearpay and add items to your cart.

2. Select Clearpay as your payment method at checkout.

3. Follow the steps to create an account.

4. Link a payment method (a debit or credit card).

5. Once your information is confirmed, you’ll receive an immediate result. If approved, Clearpay will take the first payment from your chosen account.

6. Your order will be shipped immediately after the initial payment.

Clearpay sends notifications before each payment to ensure you have enough funds in your account.

To shop in-store, download the Clearpay app from the iStore or Google Play and follow the in-app setup instructions for your Clearpay account. You can then proceed with your purchase and use Clearpay via Apple Pay or Google Pay at checkout.

You’ll pay 25% upfront (the first of four payments) and take the items with you. The remaining three payments will be deducted every two weeks.

What Happens If I Miss a Payment?

If you miss a payment, Clearpay will immediately block you from making further purchases using the service. For orders under £24, the late fee cap is £6.

For orders over £24, if you don’t select an alternative payment method, you have until 11 p.m. the next day to complete the transaction. Otherwise, a £6 late fee will be charged.

If the payment isn’t made within seven days, an additional £6 fee will be added. Late fees are capped at 25% of the order value or £36, whichever is lower, for orders of £24 or more.

Credit reference agencies have announced that BNPL debts will begin appearing on credit reports from Spring 2022, which means your credit score could be affected.

Clearpay vs Klarna

Founded in 2005, Klarna is currently one of the UK’s most popular BNPL apps, with over 10 million downloads from the Google Play Store as of July 2022.

Unlike Clearpay, Klarna offers three payment methods:

1. Pay in 30 days. Receive an invoice and pay the full amount within 30 days.

2. Financing. Spread the cost with monthly instalments at interest rates of up to 18.9% APR.

3. Pay in 3. Divide the purchase cost into three interest-free payments. The first at the time of purchase, the second after 30 days, and the third after 60 days.

Clearpay does not perform credit checks or consider your credit score when assessing your ability to pay, though it may pre-authorise your selected payment method. Klarna, however, performs soft credit checks for its Pay in 30 and Pay in 3 options.

Clearpay charges a late fee capped at £6, depending on your order value, and you’ll be blocked from further purchases. For payments overdue by seven days on purchases over £24, an additional £6 is added.

Klarna does not charge late fees for missed payments. If you chose the Pay in 3 option, Klarna will attempt to collect the payment twice more. If unsuccessful, the amount is added to your next instalment.

If you still can’t pay after the third attempt, Klarna will contact you to see if you’d prefer an alternative payment method. If no solution is found, the debt may be passed to a collection agency.

For the Pay in 30 credit option, if the debt remains unpaid for several months, it will also be classed as overdue and passed to a collection agency.

Summary

Clearpay is one of the best-known BNPL platforms in the UK, and for good reason. The platform offers some very handy features and is easy to use, set up, and manage.

There are, however, two main downsides:

1. Compared to Klarna’s three payment options, Clearpay offers fewer choices, and customers can’t “try before they buy” without paying the first instalment.

2. Because of Clearpay’s £6 late fee, many users may prefer Klarna, which doesn’t charge any late fees.

The post What is Clearpay and How It Works appeared first on Hazoo.

Key Takeaways

• Klarna is a leading BNPL service founded in Sweden in 2005.

• Klarna users can split purchases into four equal installments, pay within 30 days, or opt for long-term financing.

• The company claims to work with 500,000 merchants and has 150 million consumers worldwide.

What is Klarna?

Founded in 2005 in Stockholm, Sweden, Klarna currently works with more than 500,000 merchants globally. The company says it has 150 million customers—including 34 million in the U.S.—who make over two million transactions daily. Klarna employs 5,000 people, whom it calls “Klarnauts.” Its investors include Sequoia Capital and Visa.

According to Klarna’s 2022 annual report, the company generated SEK 13.3 billion in revenue that year, with a net loss of SEK 10.4 billion.

In his letter to shareholders in the annual report, CEO and co-founder Sebastian Siemiatkowski wrote, “We are making tangible progress toward profitability, expanding well beyond e-commerce, and reducing credit losses and costs. GMV increased 22% year-over-year in 2022.” GMV stands for gross merchandise value or volume.

Klarna’s retail partners include Anthropologie, Converse, Etsy, Harley-Davidson, Harry & David, Instacart, LensCrafters, Nike, Petco, Versace, Wayfair, and many others. Retail categories include automotive, beauty, Black-owned businesses, apparel and fashion, and electronics.

Since 2014, Klarna has had offices in Columbus, Ohio, where its North American headquarters are located. Other offices include New York and Los Angeles, as well as other major cities in the U.S. and worldwide.

The BNPL model has proven popular among shoppers in recent years, and Klarna is not alone in this space. Klarna and its competitors are also attractive to retailers—especially online ones—who struggle to get shoppers to complete purchases after adding items to their carts. Industry-wide, cart abandonment rates are about 70%. Shoppers often abandon carts because they don’t want to create an account or the checkout process is too complicated. Klarna and other BNPL providers help reduce this payment friction.

How Klarna Works

Consumers must be at least 18 years old to use Klarna, and they can download the Klarna app from the App Store or Google Play.

There’s no fee to sign up, and Klarna doesn’t perform a credit check at that stage. When a consumer makes or attempts a purchase, Klarna may perform a soft credit check, which doesn’t impact credit scores.

Klarna doesn’t charge users for using its “Pay in 4” service at participating retailers. The app can also be used at other retailers for a $2 service fee.

Consumers who fail to pay their bills on time may be charged a $7 late fee after 10 days. However, Klarna says, “The total amount of late fees charged on an order will never exceed 25% of your Total Purchase Amount.” If a user is unable to pay, Klarna may hand the account over to a collection agency and report the default to credit bureaus, which can negatively affect credit scores.

Klarna can approve or deny any purchase. Reasons for denial may include the consumer already carrying a high balance or the purchase being for a large amount. Klarna suggests that linking a bank account may reduce the risk of being declined.

Since Klarna doesn’t charge interest or fees for its standard payment options, how does it make money? Primarily through participating merchants, who reportedly pay Klarna both a flat fee per transaction and a percentage of the total sale, which can vary by country and the Klarna service used. According to the National Retail Federation, in 2022 U.S. merchants paid about 5% in total costs to use Klarna or its rival Afterpay—roughly double the fees paid to credit card companies.

Does Klarna Have Any Drawbacks?

In addition to higher costs for merchants—which can in some cases be passed on to consumers—BNPL services like Klarna have raised concerns about whether they encourage overspending and taking on more debt than users can handle safely. Klarna admits its own data shows consumers tend to spend more when BNPL is available, resulting in a 41% increase in average order value.

In response to these concerns, a Klarna spokesperson told The Guardian in 2018, “We have safeguards in place to ensure our products are only offered to people who can afford them and repay in a sustainable way, without affecting their financial well-being.”

More recently, a March 2023 report by the Consumer Financial Protection Bureau found that BNPL users “are much more likely than non-BNPL borrowers to be highly indebted, use credit cards, experience delinquencies on traditional credit products, and use high-cost financial services such as payday loans, pawn loans, and check cashing.” However, it also noted that such signs of “financial distress were already evident for these consumers even before BNPL became widespread in 2019.” The report concluded that a key question for future research is whether BNPL improves or worsens the financial health of struggling consumers.

What Credit Score Do You Need for Klarna?

Klarna doesn’t specify a minimum required credit score, but it may check your credit report through TransUnion when you use the service. The company states, “When we perform a credit check, we use the information you provide to verify your identity and review your credit report to understand your financial behavior and assess your creditworthiness.”

Does Using Klarna Hurt Your Credit Score?

Using Klarna won’t hurt your credit score as long as you pay your bills on time.

What Is the Maximum Spending Limit on Klarna?

Klarna doesn’t assign users a fixed credit limit. Instead, the spending limit varies with each transaction based on factors such as the user’s balance, payment history, chosen payment option, and the specific retailer. The Klarna app shows users their estimated available “Purchasing Power.”

The Bottom Line

Klarna is a leading buy now, pay later (BNPL) service with a strong presence in the U.S. and globally. While BNPL services are convenient and growing in popularity, consumer advocates continue to question whether they worsen Americans’ debt management issues. However, recent research suggests the long-term impact—positive or negative—is still unclear.

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