A short consumer-advice video by Daniel Rosen warning viewers against using buy-now-pay-later services like Klarna and Afterpay. The speaker reports repeatedly finding dozens of collections from these services on clients' credit reports, argues they typically do not improve credit scores even with on-time payments, and cautions that missed payments often lead to collections and growing debts—especially among younger shoppers.
Don't use Klarna or Afterpay or any of those services. Don't do it for a credit repair company. And I would analyze people's reports for them. We would look at all of their collections and what was dragging down their score. And time and time again, I would open up people's reports and find dozens of collections from services like this. You see Klarna and afterpay advocate for the financing of mostly non essential goods. A lot of clothing stores, makeup companies like gift companies, and they trick people, especially young people, into thinking that it's simply an easier way to pay. Well, I don't have to pay right now. That sounds nice. I'd rather split this up in a multiple payment. Anyone would. What a lot of people don't realize is that Klarna and afterpay aren't going to contribute positively to your credit report, even when you make your payments on time. But as soon as you slip up collection, and these of course are marketed so strongly that everyone's going to just click that option. They want you to go into collections because that's where they make the most money without realizing that they're racking up tons of debts on multiple items.
