Marks & Spencer has come under fire for launching a credit service that allows customers to borrow up to £500 in minutes.
The Sparks Pay credit account is reminiscent of buy-now-pay-later deals and could lure financially stretched families into debt, critics warned.
The service is available for about 16million members through the M&S Sparks loyalty scheme.
It will be offered first to customers shopping online and via its mobile app, before being rolled out in the high street next year.
Shoppers will be asked to fill in an application form to qualify for an account. Then a decision will be delivered within minutes.
If approved, customers will be able to make purchases using the account with ‘one click’.
They can borrow a maximum of £500. If they repay the balance within 45 days – or 76 if it is their first order – there will be no interest charged.
After that, balances incur interest at a rate of 23.9 per cent. It is not yet known how the service will work in physical stores.
Labour MP Stella Creasy said: ‘I’m not surprised brands are doing this, because there is so much to be made from pushing people to keep spending money they don’t have.
‘M&S aren’t doing this out of the kindness of their heart to help you budget, they’re doing it to help you keep spending at their shop.’
Consumer champion Martyn James added: ‘The trouble with ‘instant credit’ is that it encourages people to spend money they don’t have – and interest-free deals are easy to sleepwalk into.
‘Everyone thinks they’ll pay the money back in time, but companies are gambling on the fact that they won’t.’
The high street giant denied its Sparks Pay credit account resembled a buy-now-pay-later scheme because it is regulated by the City watchdog, the Financial Conduct Authority – unlike firms such as Klarna.
M&S checks customers’ debts and payment histories to determine how much they can borrow.
M&S said: ‘Should any M&S Bank customer experience financial difficulty and need further assistance, we have a dedicated financial support team who would be able to support and discuss the right solution for the customer. ‘
M&S under fire for ‘buy-now-pay-later’ plan as critics say it could plunge many into debt