Important points
- Klarna, known for its buy-now-pay-later services, is set to introduce a membership program in the U.S. aimed at providing an alternative to luxury credit cards like the American Express Platinum and Chase Sapphire Reserve.
- The Premium and Max programs will offer users access to various subscriptions, cashbacks, and additional perks.
Klarna is stepping into the premium credit card arena.
On Monday, the BNPL company announced plans to launch its luxury credit card alternatives in Europe, which aims to attract customers who pay hefty annual fees for perks like airport lounge access and dining privileges. A representative mentioned that Klarna’s $18/month Premium membership and $45/month Max membership will become available in the U.S. later this year.
David Sandstrom, Klarna’s chief marketing officer, expressed, “Historically, exclusive benefits such as airport lounge access and premium travel insurance have only been available to elite credit cardholders. With Klarna membership, consumers can experience travel, lifestyle, and digital benefits in one straightforward plan, without the usual credit-based rewards or hidden charges.”
Credit card companies are in a race for premium clientele, enhancing their benefit offerings while also increasing fees. These lenders are getting inventive with the perks, providing everything from pet insurance to discounted tickets for sporting events.
What this means for consumers
Both Klarna and Citigroup collaborate with third-party services to offer airport lounge access. As more companies add these kinds of benefits to attract premium credit card users, it’s likely that airport lounges could become busier and less appealing. Klarna’s new offering illustrates that traditional banks aren’t the only ones trying to reel in consumers with enticing perks.
For instance, American Express has enhanced the Platinum Card by significantly increasing restaurant credits and other benefits, even while its annual fee has jumped from $695 to $895. Similarly, JPMorgan Chase has made its Sapphire Reserve card’s rewards more favorable, raising its annual fee from $550 to $795.
Citigroup recently introduced its own premium card, Strata Elite, which, like Klarna’s offering, lacks access to branded airport lounges compared to those from Capital One or Chase.
Klarna’s premium membership costs around $220 annually and includes subscriptions to over a dozen services, such as media companies like Condé Nast and the New York Times, as well as workout and beauty platform ClassPass and laundry service Laundryheap. Members will also earn 0.5% cashback with Klarna Balance, which functions similarly to a bank account and is managed in partnership with WebBank.
The Max program, priced at about $540 per year, includes the aforementioned subscriptions along with travel and car rental insurance, 1% cashback with Klarna Balance, and access to numerous airport lounges via LoungeKey.
This initiative represents Klarna’s effort to engage users in traditional banking products. Currently, about 1.2 million Americans are utilizing Balance, which is designed like a bank account and is offered through an FDIC-insured partner.
In recent development, Klarna’s shares have seen a nearly 4% rise since going public last month.
