That’s a good point, Sacha. Something that doesn’t seem to have featured in the discussion so far, is that Monzo have a Head of Financial Difficulties with a team dedicated to trying to prevent people from being in financial hardship. I don’t know how this compares to other banks, but it seems to me Monzo’s approach to overdrafts is to not keep people in them, but to help them use them temporarily and then get out of them. Which is not an approach I feel traditional banks take (building societies excepted).
And from back in January when Stuart introduced himself:
Monzo have clearly done a fair bit of research into approaches to overdrafts already, and are now testing this with a larger pilot. But the overdrafts also have to be taken in the context of the rest of Monzo, including the Financial Difficulties team, and the future Spread the Cost product. How overdrafts end up being used, and what their total cost to people, will depend a lot on the details of what the limits are, when you are steered to a different product, and how the financial difficulties team works with people who are struggling to get out of their overdrafts. Tom was pretty clear above that he doesn’t want people to be using their overdrafts for long periods of time.
tl;dr from me is: There are some genuine concerns over the flat rate; but Monzo haven’t slapped this together without careful consideration; or without concern for their customers’ well-being; and it is just one (important) piece of the lending puzzle; so I’m willing to give them the benefit of the doubt to see how this works out on a larger scale. (Not that it’s up to me! 
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