Welcome to a special edition of the Travel Again podcast live from Money 20/20 with guest Brian Kelly, the Points Guy. Hear from Brian today on why you must take action now to protect your loyalty points. And now, on with the show.
I am here with Brian Kelly, founder and CEO of the Points Guy, at the Money 20/20 event live here in Las Vegas. Welcome, Brian. Thanks for having me. It is great to be here with you. Certainly, a huge conference with lots of activity. You did a keynote and shared a lot of information. We will get into that in a minute, but mostly I just want to talk to you for a minute about the question you have probably been asked a million times: how did you get into points? How did this all start?
How did I become the Points Guy? My mom texts me, “TPG, when are you coming home?” It is totally Brian’s. That was early in the day when I started the blog. My mom started calling me TPG and, in the same week, someone in New York City randomly on the street said, “The Points Guy,” and I was like, “I think I am onto a brand here. I am going to lean into it.” I love being the Points Guy.
The brief version of it is my dad worked for a consulting startup in the 90s. He got a job working from home in healthcare consulting and didn’t really know how to use the computer. He always had a secretary, so he gets a startup job at home and I am the computer whiz at age 11 or 12. I started booking all of his travel. That was one of my first jobs; he would pay me to book his travel. In 1995, he said, “I have got all these US Airways and American miles and I don’t know what the heck to do, but if you can figure it out…” At age 12, I planned our family of six—I have got three siblings—and we went to the Cayman Islands for free.
In 1996, there was no 9/11 security. That was our bonding every year. My dad would miss basketball games and events due to work. His work travel was a pain, but the silver lining was that every year we got to go on amazing trips that brought our family together. That was when I really learned about points. In the early 2000s, I went to the University of Pittsburgh. I was student body president and all of a sudden, I started traveling a ton for student government conferences, study abroad in Spain, and spring break in Ireland. One day I got US Airways Gold status. I don’t know how, because I wasn’t traveling that much on these really cheap tickets. That is when I realized, while Googling around, and found FlyerTalk, which is a community. That was my moment where I was like, “Wait, there is alien life out there. There are other people who have been doing this points thing.” It was really a major moment for me.
There are a number of those early internet moments when people found other people were in the same thing. My dad and I were going around to Wendy’s; Wendy’s had American Airline mile coupons. We had family members in the 90s that would send us Life cereal boxes that had coupons. There was all sorts of gaming. I graduated from college and ended up working at Morgan Stanley in 2007. All my friends in finance are getting rich in our 20s with six-figure salaries and I am like, “Okay, here is my shot.” Of course, my timing was August of 2007. I was in HR recruiting, so I knew I wasn’t going to be making the banking big bucks. Then, of course, 2008 rolls around and uproots the industry. Luckily, I never got laid off. In tech, I was recruiting all the tech undergrad and grad students, so Morgan Stanley knew they had to keep hiring. My division was the one that actually was told to keep hiring more, so I had some good job security.
I called AMX one day and asked, “Can I get my points from my corporate AMX?” I am putting like $100,000 a month on it. They were like, “Oh well, for $95 most people decide it is not worth it.” Meanwhile, I am like, “A million miles for $95?” In 2008, a million AMX points was probably 14 round-trip business class tickets to Europe for 95 bucks. It was the deal of the century. Throughout those years, they were tough times to work in finance, but my compensation, my bonus—in every year they would be like, “Getting not laid off was your bonus this year”—but I had what I call my points-rich, cash-poor era of my life. It was cheaper for me to fly because I had elite status in every program, as I was one of the few people still traveling.
Starwood Hotels back in the day was my love. Many business travelers reminisce about Starwood; those were the days. I was rich on points traveling and finally, around 2010, my friends were like… because I would travel first class to hotel suites on the weekends because it was cheaper than staying in New York City. I would go and get all my meals covered on the plane, in the lounge, and in the hotel. I would come back and I didn’t spend any money because an elite status effect then was getting penthouse suites. I was living that point stream. In 2010, finally, I was like, “I actually need money.” As much as I love my Starwood and Delta miles, I can’t pay for wedding gifts. You could, but it was… so I started the Points Guy in 2010. It was just a blog. The original business was me charging people $50 or $100 and I would tell them how to use their points. I was like a points travel agent with this little blog that was meant to get more travel agent customers to my points consultancy.
In 2011, the blog started to get popular and I ran into the affiliate marketing space. That was the day that changed my life trajectory forever because I learned blogging all of a sudden wasn’t just 100 bucks in Google AdSense; it was a million dollars within six months. That was “Okay, see you Wall Street, whole new life.” Then we built the Points Guy. Since then, we have nearly 200 employees and growing, and a huge influence of a media platform. It has been quite a journey and I am still here. I sold it, it got sold again, but I am still here kind of spreading the gospel of points. While the game has changed, they are still incredibly valuable. Part of why I am here at Money 20/20 is to hopefully keep them valuable, especially for small businesses.
Let’s dig into that a little bit because your role has been helping consumers. You are obviously passionate about the issue. There is a whole industry that gets really fueled, energized, and has grown because of points. The economic impact is tremendous, but we have got this legislative issue. Maybe just tell us a little bit about that, what is at stake here, and where are we?
For your audience on this podcast, I don’t have to go into too much, but travel is huge and loyalty is huge. They call the airlines the flying banks these days. Loyalty is huge; it is employing hundreds of thousands of people. It is allowing people to travel that could not otherwise afford to in these times of inflation. I know because I am on the front lines on the consumer side of people being able to see family members who are sick or last-minute funerals in a family. Last-minute tickets are crazy; points are what connect families. Whether you are Democrat or Republican, Independent, or everything in between, we all love travel and saving money. This is one of those things where I am like, “Okay, great, this is something we can all agree on.”
About a couple years ago, I remember hearing about new legislation that would be catastrophic: the Credit Card Competition Act, as they so call it, by none other than Senator Durban. For people who don’t know, post-financial crisis Dodd-Frank Financial Act that was put in, Durban put in a side piece of legislation called the Durban Amendment that really took down the interchange on debit. What that did was, overnight, debit rewards went away. What most people don’t realize is you used to be able to use a debit card, like the Continental Airlines OnePass debit card. That was before I had good credit; I was using that card to participate, or the SunTrust Delta card. There were a lot of people who wanted to use debit and it was great for consumers. Even if you couldn’t get a credit card, you were participating in the loyalty economy earning valuable rewards.
Durban’s amendment killed them overnight. Debit rewards went away because Durban legislated the interchange down. As we know, I remember I was blogging as the Points Guy during those times and I have the emails and the blog posts still saved. Credit card rewards went away. Durban will say, “Well, we did that to help the consumer because by reducing that interchange for merchants, they were going to reduce the price of goods across the board,” which is a ridiculous trickle-down effect. It is kind of funny for a senior Democrat to preach the trickle-down gospel for sure.
We have got ten years from then, so let’s not speculate; let’s look at the cold hard facts. There have been numerous independent government studies. The Federal Reserve Bank of Richmond did a very vetted, years-long study. Those price drops never hit consumers. Consumers and many, many merchants charged more, so they kept the savings. Really what we are talking about are the huge stores, the Targets, the Walmarts; they got billions taken, in my opinion, from the consumer pocket. Those debit consumers who used to get rewards, the value of those rewards now goes to shareholders of Walmart. Their stock price goes up. Frankly, people who couldn’t get credit cards no longer could participate in the economy.
It didn’t just stop there. Back in those days, the banks would offer free checking accounts and free services because they knew once you got your debit card and started spending every day, the bank could make up for the cost of doing business, vetting you, and setting you up with accounts. The cost of running a branch for you to use—none of that is free, but it was paid for via interchange. That all went away by Durban, the Grim Reaper of Rewards. Fees on checking accounts went up and account minimums increased because the banks had to figure out some way to pay for the teller who doesn’t work for free. In the end, consumers lost big time. Unequivocally, I have not seen one argument based in fact that shows that consumers benefited by the Durban Amendment. This really is about Durban playing for the big retailers and huge lobbying dollars. They are now… I know there are big dollars going into this because the retail industry is now coming after me personally because I am lobbying publicly for consumers, which I take as an honor. They know our message is valid.
On this Credit Card Competition Act, it is not as simple as the Durban Amendment was. This actually, in my opinion, is worse many times over. What this bill would do is if you have a Visa or Mastercard, they will force you to get essentially a debit network onto your card. Then every single time you use your card, the retailer chooses which network. Not the Visa network that gets you triple points and purchase protection and airline elite status that you need so that when your flights are delayed you can get home to your family earlier. No, it takes the power away from the consumer and says you no longer get to decide how you use your money. The retailer will decide to run your transaction on a poor, bare-bones network with much less fraud protection.
Today, if there is a single piece of fraud on any credit card, you call up and it is done; it is off. No money ever leaves your account. With debit-like transactions or ACH when that is pulled, you ask anyone with a debit card; your money is gone. You eventually probably will get it back, but it is time-consuming. There is not the customer service, so consumers lose huge. And let’s talk about time. You go out to a restaurant with your partner and you need to argue with the waiter at checkout? The whole meal you are worrying about, “Okay, now it’s time to pay and I am going to have to arm-twist him to make sure I get the network.” That is annoying. Who the heck on a romantic night out is going to do that? The waiters don’t want to deal with this because they may have their manager saying, “No, we need to bring down costs and you are going to run everything on the low network.” Just imagine a world where waiters and patrons are fighting over which network—two dueling networks on a card. Frankly, a lot of consumers will give up and lose the points value from it.
Once again, on the unintended consequence, consumers lose for sure. That is not even a question. But then they are going to lose again because the travel industry, which relies so heavily on these co-branded credit cards… when that co-branded revenue drops, where do you think they are going to try to make it up from? Do you think all the major airlines who have to hit growth targets and have shareholders are going to be like, “Shucks, we will just pass along savings to a consumer while we are losing all this revenue”? It doesn’t work like that. Consumers are going to have higher airfare. People will travel less to top destinations like Las Vegas, for which we have cold hard numbers: I think 800,000 people came here on points last year. Who then loses? The employees, the waiters who don’t have as many tips. The unintended consequences and downstream impact is huge. That is why I am in Vegas talking about that.
I read through all your research. I have like five stats I pulled out; you can fact-check me on these. 80% of Americans have cards with points. 70% redeem points for travel. In 2023, 30% of households with income under $75,000 redeemed for travel benefits of some kind, valuing at about 500 bucks on average. 20% of all travel bookings are points-related, and a 10% decrease in travel redemption use of points would lose about $4.3 billion of economic impact. Those numbers are a giant meteor coming at our industry.
It is shocking to me how many people don’t know about it or will rest on their laurels and say, “Oh Brian, you and the banks got this.” The banks have so much money, but guess what, so do the retailers. Think about congressional districts: how many banks are there in a congressional district and how many businesses are there? Banks are outnumbered. I think our message, when consumers hear it, is across the board. This is not a Democrat or Republican issue. There is bipartisan support for this bill, but there is also bipartisan descent for the bill too. It is a very complicated issue. I urge anyone in a position of power, anyone in financial services or travel industries, to look at how this will impact your business. There will be negative reverberations that you may think you are far away from. “Oh, my business doesn’t run on credit cards.” Well, guess what: does your business revolve around tourists and people spending? When people have to spend more to travel, are they going to spend more at your travel business?
Back to your point, which I think is very important, this isn’t just travel. I know a lot of Americans who have cash-back credit cards that go directly into 529 accounts for their kids. You can get 2% of everything you spend back towards that. You can put that towards a car; there are a lot of car manufacturers involved. In a time of inflation and so many crises impacting our country, why would we want to pass legislation that at a minimum would take away cash back from everyday Americans’ lives? Aren’t we trying to battle inflation? These are offsets. This is based on the premise of retailers and infinite goodness trickling down savings. Trust us, the Durban stuff, forget about that. It is lunacy at its core.
Unfortunately, who knows what happens with this election coming up, but this issue does not die on Election Day. In fact, there is a higher chance it could get rammed through. Everyone—I know we are all sick and tired of the election nonsense and the sound bites—but this could impact a lot of people. Anyone with points, anyone who likes to travel or has a business in financial services or tourism, do not let your guard down on this because DC is a funny place.
For our audience, a little bit of insight on the risk after the election. It is tightened because what Senator Durban and Senator Marshall, the co-sponsors on this, know is that on its merits they can’t get it through. The fallback in Washington is what he did before: you attach it to something that will go through. You use it as a lever. I’ll hold up a bill that is going through for budget or funding, like the defense bill, and tack it onto that and ramrod it through. They know it won’t pass on its own merits because if people saw a poll, they would be overwhelmingly against this. That is their only attempt. During a post-election lame-duck period is a high-risk period for quirky, intended or unintended consequence stuff happening. Our guard has to be up.
The House of Representatives has basically said we don’t want to deal with this. Look at the wars, look at our immigration crisis. For people who are not political, our government is barely functional. We see the shutdowns. There is a very limited calendar of legislative opportunity. I think even if you were to support this bill, I don’t think anyone would say that this bill takes precedence over the top issues. Interchange for big retailers is not a top 20 priority when you look at all the other issues impacting everyday Americans.
Is something happening with interchange fees—what merchants pay—over the last seven to ten years? Has there been big inflation in the amount? It is flat. It is flat. There is not even an economic reason for doing it. As the Points Guy, I note the credit card industry has gotten more lucrative for consumers. This is the funniest thing about this bill being called the Competition Act. This really riles me up. America is the global epicenter for competition in financial services and credit cards. In America today, you can get 20 credit cards that have a sign-up bonus value of $1,000 or more with different airlines, different banks, different cash-back rotating categories, no annual fee… about every variation possible on this side. There is no other country in the world that comes close to the competition, which is great for consumers. Our millions of Points Guy readers know you just pay your bills and you can actually get credit cards where you reap value and then your credit score goes up. This is not a predatory industry that we are talking about. If you play it right and you pay your bills off, you avoid interest, and your credit goes up. This is a system that is greatly benefiting a lot of people.
It is just… I try to understand the other side. There isn’t one. At Money 20/20, I met a senior executive from the ACH and payments side. After my speech where I called that bare-bones network an inferior experience, I said: “Today, if you have fraud on your Visa Signature card and you call your bank, you get through, they take it off. You may have to send a police report, but it is being taken off. You have customer service.” That will not be the case. It eventually probably will get taken up, but it will take more time. This executive admitted, “Well, it will take more time and it will be more of a process, but at the end you will get essentially the same net result.” I looked her in the eyes and said, “So a process that takes time away from me running my business and spending time with my children is better to you? Explain. Time is money.” If someone is going to pay for premium service, which many people like to do, and the government is going to force me to use an inferior network… there is no way that you can tell me that having to jump through a million hoops will be better than the status quo. She just said, “Well, I don’t like how you call it inferior.” Okay, I understand you don’t like how I call it, but give me the data. Give me the argument. There was no argument; she was just trying to do a PR push on me. That is essentially the other side’s argument. I think they want to ram this through because if they don’t get it through this time, they know that this bill is at least going away for a while.
The other comment here at the conference was: to see everybody—all the different banks, small businesses, consumers—everyone lining up in favor of something, essentially in support of this initiative… that never happens even in the bank community. As in any industry, you always have different sides and competition. This is one of those where it is no one but the big-box retailers and Senator Durban and Marshall over here, and then everybody else is against us. Even small business people will say, “Well, what about small businesses? They do need relief.” I said there are certainly ways that we need to reduce inflation in this country, but this method is not going to be it. When you go to a store—and I know my audience—when you are going to get triple points and you have protections, I know a lot of people who put things on their credit card because they can get value and know that if there is any fraud, it is going to be protected. When you strip that away from consumers, I warn retailers: you may say it saves a percent of the purchase price in the short term, but when you anger your best customers and other methods come up that consumers will use, you are going to lose far more than what you think you are going to save.
Other than the big retailers, this is just money dropping to the bottom line. They don’t care. If they get it through, then it is a huge windfall. Look at Target and Walmart’s quarterly results; this is a drop in the bucket to them. It is sinister in my opinion that they would take that value that today goes to the consumer pocket just to throw it into their huge cauldron of earnings for their stockholders for basically a marginal gain. But that is the easiest way to grow your business when you don’t have to innovate. If you don’t want people using credit cards and paying the processing fee, offer a better payment process. Fine, you don’t want to use credit cards? Offer cash. Offer your own loyalty program for debit transactions. Many retailers do this. Verizon will give you a discount on your bill if you pay via ACH. Get smart. You want to avoid using this premium network? Then come up with something. At Money 20/20, there are a plethora of new businesses coming up with smart payment models. My push to the industry is: don’t bring the government in to legislate something because even if you are not going to get your intended result, it is going to blow up in all of our faces. The government starts trying to come in and write sweeping legislation for an industry that is incredibly complex and has huge impacts across the economy.
In the case of the travel industry, it works really well. I think of some of the case studies people step forward with. Here in Vegas, the folks in the airports have said half of the people that come here are coming on points to get here. What happens to Charleston? When people come to Charleston on points and they are staying at their Marriott hotel and they got their flights, guess what: they are spending more in the local community. That is an entire community based on tourism. You look at the impact of that and the downstream economic impact… by then, they will have washed their hands of it and it’s like, “Oh well.” This was never about consumers; this was about something else.
Great insight. Thank you for taking the banner to lead the charge on this. Tell us now: we reach an audience of people that work in the travel industry and key influencers that can help with this. What should they do?
The biggest thing you can do is everyone needs to email their senators. Tell your organizations and your employees. It is very simple. We have a website, protectyourpoints.com, and within 60 seconds you can send a very well-written email to your senator. We know we have had hundreds of thousands of letters written into senators, and trust me, these letters count. For those who aren’t aware, every week senators and any legislator will have their staff tabulate what are the issues impacting their constituents. When they get floods across the board in key counties and key places, especially with this election being a nail-biter, the more we write and the more people let them know that this is just something that, of all the things you should be working on, Senator, this is not one of them. This is not it. Don’t take something out of my pocket.
I have seen it firsthand. I know people who work in these offices and they are like, “You at the Points Guy have driven hard.” This is one of the most effective lobbying campaigns that our partners have ever seen in terms of organic everyday voters being incensed when they hear the facts. The senators know. I think now is the time. Let’s keep our feet on the gas even post-election. Doesn’t matter what happens on Election Day because this lame-duck congress… likely the Senate is going to change, which will up the stakes for the retailers to do whatever it takes. Durban is a skilled tactician. Do not put anything past Senator Durban. He is the majority whip; he has been doing this and knows how to get things through. Post-election, people could be distracted. Once again, anyone in the travel business, this will very likely hurt your business, so keep on the pressure.
We will. If you work in the industry, your voice matters. Tell people in your networks and get the word out. We will make sure all the information gets out on where they go and how they can do the letters. It is easy stuff to do online and they do take notice. Never underestimate your power. Having worked in Washington a long time, there are many public servants who are really trying to do the right things by their constituents, so your voice does matter. It is not just the leaders you read about in the news or the leadership in the parties; all of those representatives and senators represent you. You tell them, and to your point, they pay attention because they have to. We will get the word out. Great cause, and again, appreciate you taking the lead on this.
Thanks for having me. Safe travels. Same to you. Brian Kelly from the Points Guy, the original and the only Points Guy. Thank you for joining us here today. Great to see you here.