Some of the fastest-growing and most-used apps in the United States aren’t games or utilities, but glorified payday loans in shiny, tech-friendly clothing. And, as a new piece in The Baffler points out, it’s in no small part due to the slew of freelancers and gig workers getting the rug pulled out from under them by the corporate world’s embrace of artificial intelligence.
You have almost certainly seen advertisements for apps that offer you a small loan to cover a cost or promise to advance you the full amount of your paycheck before payday. The idea is pretty simple: you download the app, it offers you a loan that’ll bridge you until the next time money hits your bank account, saving you from overdraft fees and late payment penalties.
In exchange, they take a little off the top—or, in an increasingly common technique to avoid the scrutiny of regulators, they charge a recurring subscription fee or ask for a “tip” for providing you the service of usury, a thing that is a grave and mortal sin in most of the world’s religions. They also usually embed themselves in your bank account and collect data to determine how much to lend you—and automatically withdraw money as soon as it hits to get paid back for what you “owe.”
These services would bristle at the prospect of being lumped together, and they all almost uniformly reject the notion that they are the Tech 2.0 version of the classically predatory payday loan. But, as The Baffler points out, the apps sure share a lot of branches to not come from the same tree. For instance, Cleo was founded by a former data engineer at British payday loan firm Wonga, and Brigit was acquired by the same company that owns the shady rent-to-own company Rent-A-Center.
Loans and credit apps are the only segment growing in the financial category, per a report from AppTweak. Per the Financial Brand, the debt people hold from taking out personal loans is growing rapidly in the US, and it is increasingly coming from fintech companies rather than traditional lenders.
People are almost certainly pushed to these apps in part because more and more people are feeling a financial crunch, but it’s also because some of these services have sought to further legitimize themselves by offering their pay advance services to corporations to pitch as a service to their employees, getting their claws into workers by going through the front door.
Of course, the services would also tell you that their user base is growing and usage is rising because people are so happy with the product. An alternative view, offered by experts, academics, and regulators alike, is that those users are stuck in a debt spiral. People keep asking for advances not because they like having their money early but because they need it. A 2025 Center for Responsible Lending report found that borrowing from users doubled during the first year of use, and more than half of users borrowed from multiple apps at the same time.
While the data on AI killing jobs is still murky, it certainly is hitting freelancers. The Baffler provided personal evidence of that, and research from the Brookings Institute certainly reflects that reality. That is a particularly vulnerable population, because they don’t always know when their next paycheck is coming. It’s no surprise that those folks would turn to services that promise to help them get by until that deposit hits.
But the second they’re in the system, they are already behind: paying a fee or a tip to access cash now, knowing that when they do get some money, these apps will make sure they get paid first before it can go to other bills. Typically, cycles like that don’t break until conditions improve. And not sure if you’ve looked around lately, but it sure doesn’t seem like things are getting better.
