It’s not news that millennials hate credit cards. Which is one of the reasons a lot of them end up as “thin file,” with through-the-roof overdraft fees.

Float – a Los Angeles-based startup, launched today – is set to change that.

Through a non-Fico based underwriting system, the platform offers customers micro-credit lines – from $50 to $1000 – that get embedded into their existing debit cards. “It’s like a safety net, so instead of, say, overdrafting, you may choose to transfer some of your Float funds to your account,” CEO Max Klein told Bank Innovation. Float charges a flat 5% for each transfer.

To apply for credit, users fill out an online application through Float’s app, and get an instant credit decision. “We don’t do any hard pulls, and the decision is based on your spending behavior, and how you manage your money, which we derive from the transactions, when you connect Float to your bank,” Klein explained.

The startup began its beta testing in July 2016, and has so far signed up 10,000 users, with 600 active monthly borrowers. Float originated $300,000 so far on its own books, with an average credit line of $300. “We will be adding more products looking forward, allowing users that don’t immediately qualify for a credit line, to work their way up through financial education that we will provide,” he said.

Float currently serves consumers in California and Utah, with plans to roll out in all 50 states over the next 6 to 12 months. “We are in the process of closing a bank partnership, which will allow us to quickly expand and gain more users,” Klein said.

The company raised $3 million in an angel round from investors that include Camp One Ventures, FundersClub, and from the 500 startups and Silicon Valley Bank & MasterCard accelerator programs, and is in the process of raising its seed round. 

To learn more about digital banking, join us in San Jose on March 6-7 for Bank Innovation 2017, where the best conversations in fintech take place. Request your invitation here.