Are banking apps luring young people into debt?

Last month, my bicycle got a flat tyre. ‘Both of those tyres are gonna need replacing and you’ve knackered your sprockets,’ huffed the bike man. The bill came to £230. It’s the kind of irritating expense that means I run out of beer money a week before payday.

I’ve always assumed I’m a reasonably normal spender. Work pays me, the money gradually disappears over the month, with hopefully a bit left over for my Isa. I’m vaguely aware that something exists called a ‘credit card’, but my parents always made clear to me that if you don’t have the money for something, don’t buy it.

Where I differ from older spenders is that like many under-thirties I use a Monzo card. It makes it easier to split bills with friends and to keep track of spending. And Monzo, which is one of those upstart banks, offers something called ‘Flex’. It’s credit, rebranded for millennials. I could spread the bike payment over three months without being charged a penny in interest. Win-win.

Monzo isn’t the only firm providing deals like this. PayPal has started offering three months of interest-free borrowing. And then there’s Klarna, a powder-pink app which launched in Sweden in 2005 and is now used for a quarter of the country’s online payments.

Klarna’s latest target is Britain. The company has 15 million customers in the UK, more than double the number it had in summer last year. It’s expected to float on the stock market soon, valued at more than £30 billion, and has been using social media influencers to push its services, in particular for fashion purchases.

Not everyone is pleased about its rapid growth. Earlier this year, the Labour MP Stella Creasy compared the firm to a notorious payday lender, calling it ‘the next Wonga waiting to happen’.