And its founder and chief executive officer,
Float Money operates like this: A customer signs up, allows Float to pull a credit score to establish a baseline "Float score" and then shops through Float with the merchants on Float's extensive list -- businesses from
Float makes its money on its agreements with the businesses. But unlike a company such as Ebates, which gives rebates for shopping with selected companies, Float lets customers build up a line of credit for a no-interest loan they can draw from when needed.
Loans may range from
Float Money, which is available in 17 states, actually loses money on making the no-interest loans. Float also allows members to use their credit to help someone else; if the company succeeds in getting into the business and nonprofit market, those business customers could then use their Float buying to build a no-interest credit pool for employees and others.
Hadden, who grew up in Danville, sees the arrangement as being superior to credit cards and in particular, to payday lending schemes.
As a former director for
Hadden thought he could provide a better financial plan: Help people build up credit by running their spending through the same tap and showing them where their money goes.
The Float method requires some patience and planning. Gift card purchases are required by some of the vendors, so whim purchases are sometimes discouraged.
"We want people to be financially healthy," Hadden said. "If they have high-rate debt we want them to replace it with Float," which he describes as "a safe alternative."
Bell is a living example of living the Float Money life. She speculated on the company's blog about how to replace her home's roof using Float vendors and discounts (a hail storm later eliminated that need because her insurance company ended up covering all but the deductible). Her family also took a Disney vacation on vendor cards purchased from Float. She purchased Christmas gifts almost entirely using Float.
The planned spending is the pinnacle of the Float experience: Customers set up delivery of Float store cards for recurring expenses -- a Speedway card for gas,
Bell said she spends
"Not only does it give you peace of mind, it gives you options," Bell said.
In that way, Float customers start to budget in advance for expenses and keep a record of how much they spend for necessities such as gas, food and medicine. It gives them a basic budgeting tool, and an incentive -- running those dollars through Float vendors to increase their credit line.
Established in 2012, Float now has 17,000 people signed up on its website, Floatmoney.com; 9,200 members; 3,200 active members whose credit activity is being reported to the TransUnion credit reporting company; and 400 "active, active people."
Hadden wants to grow that last number to 10,000 by the end of 2015. He acknowledges that's going to require explaining the idea to a lot more people, which will be challenging because Float is not just a shopper's club.
The company is funded by an eclectic mix of sources:
"Having that Float line is an incredible sense of security. ... All we ask is to budget and plan and spend through us," Bell said.
A credit card gives people an interest-free loan for 30 days, Hadden said, before interest charges on the unpaid balance start to mount. Float customers may leverage their spending to get an interest-free loan for 10 months.
"A lot of people kind of forget how risky credits cards are," Hadden said, describing Float as a product for everyone with normal financial pressures and occasional unexpected expenses.
"I don't do all of my shopping through Float, but I do have a scheduled plan where two times a month I deposit money into my Float account where Float issues me cards for
Mullineaux is both an investor and a customer of Float because he wanted to see how the new financial product worked for himself.
"It's particularly useful for people who are trying to build a credit history and don't have one, because Float reports to the credit bureaus," Mullineaux said. "The planned spending component is a very valuable part of what we're offering."
"It's always interesting when you can use technology to disrupt an existing industry that's been so ingrained like the credit card and payday loan industry," Self said.
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