Brian Kelly, a.k.a. "the Points Guy," told me what I needed to do to come out ahead in my interactions with credit card companies.
Illustration by Wren McDonald
When you're walking through an airport, sweaty and tired and sore and worried about the debt you're racking up by spending hundreds of dollars to go to yet another fucking destination wedding, occasionally you'll catch a glimpse of someone like Brian Kelly. The former Wall Street worker is one of those incredibly put-together people who never seem fazed by jet lag or a delay or one of the other hassles that inevitably come with air travel. And there's a reason he looks so sanguine: His latest trip—with stops in Ghana, Rwanda, and South Africa—cost him $5.60.
Online, Kelly is known as the Points Guy, the proprietor of a blog dedicated to teaching people how to manipulate credit card perks and frequent flyer miles to score free or nearly free trips. He's a pioneer of a larger community of so-called "travel hackers," many of whom game the system like card-counters at a casino. But Kelly just uses common sense and aboveboard methods that you don't have to be Rain Man to understand. (He earns his a living by way of ads for credit cards on his website, but says he doesn't take any freebies from advertisers.) As such, he's treated like a celebrity in the travel and consumer advocacy blogospheres. His French bulldog, Miles, even has his own Instagram.
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All of this is impressive to me, because as saddled with student loans and other debt as I am, I really, really can't afford out-of-country jaunts. The concept of getting something for nothing is intoxicating, as is the idea that I could come out ahead in an interaction with a credit card company, so I rode with him on his way from JFK Airport to his apartment in Midtown Manhattan to pick his brain; he told me that I could get a free ticket to Europe in a matter of mere months.
VICE: How did you get started learning about points?
Brian Kelly: In the 90s, I was like 13 years old and always good on the computer. And my dad was a consultant, so he was always traveling and had no idea how to even use a computer. So I would charge him and book all of the flights on Velocity the year it opened. We started to get all these points, and he didn't know how to use them. And so I booked a trip to the Cayman Islands when I was like 13 and it was like free, and we were like, "What the fuck?" It sucked that my dad had to travel so much, but we were a family of six, middle-class outside of Philly, and all of a sudden we were taking trips to the Caribbean for the price of going to the Jersey Shore.
Then I went to college, the University of Pittsburgh, and I studied abroad. I was going to a couple of conferences and went abroad twice, and all of sudden I had, like, gold status. So then it was like, "Holy shit, I'm a college student with negative income and I'm getting upgraded on every flight I take. There's something really interesting going on here."
So when did you get into the community of people who do this?
Around 2005 is when I discovered the subculture. This was the travel hacking community before it was really called "travel hacking." We were just frequent flyer mile enthusiasts. I didn't start blogging until 2010, and there were a couple of other blogs at the time, but I was the first one to do it from New York. I worked on Wall Street at the time doing recruiting on college campuses... I was traveling around the US basically trying to convince [tech students] to work on Wall Street instead of Apple, Google, Facebook.
That was when I was racking in millions of miles per year, because I was paying for information sessions, and so even though it was during the recession, I was traveling like a multimillionaire. That was the whole genesis of the site. My friends were like, "You must have a trust fund to be going to the Seychelles. You work in HR and you're making like, $65,000 a year." But the amount of money I redeemed on miles was more than my annual salary. I was cash poor, but miles rich.
I quit my job the year after I made my first blog post. I took a trip to Tokyo and just said, "Let's do this."
"Let's do this" is how I feel right now, because I'm about two weeks away from paying off my credit card debt and fixing my score. How long do I have to wait to get started once that's done?
You'll be so surprised that the minute you pay them off, it's almost an immediate jump. Utilization is the number-one factor in your credit score. As long as you pay your bills on time and don't have any late payments, you're gonna be fine. You're on the cusp. What's your score?
Very bad. About 580.
You're fine. It's probably just because you have a relatively short credit history and a lot of credit, so you're high-risk. But once you pay that off—I'm not kidding, in one month it can shoot up 50, 100 points.
OK, once my credit score gets in a good place, what's my first step?
I'll start with the type of credit card you should get. There are three main types. The best kind are transferable points cards. These are cards where you accrue points into a central pool and then you can transfer to another of different partners. You have a million options on how to redeem them. With airline credit cards, you're betting on that airline. And that's what I always warn people: Would you put your entire life savings into Apple stock? Just because it did great last year, it could tank this year, and then you'd be screwed.
That's the same exact thing that happens with airlines. Some are amazing, but overnight they can devalue [their points.] Like Delta overnight will be like, "OK, now it's twice as much to get to Asia." And people are like, "What the fuck? I've been saving up for like, four years." And so the airlines will move the goalpost. But if you're in an AmEx program—AmEx has 20-something other partners so you can say, "I don't even wanna go with Delta, I wanna use some of the other partners to go to Asia." So it's really about diversifying.
So I don't want an airline-specific card. What card should I get, then?
The number-one card most people in this space use, and especially New Yorkers, is the Chase Sapphire Preferred. It's got good earning and redeeming. You earn two points per dollar on all travel and all dining. So most airline or hotel credit cards, you get two points for that airlines or that hotel, but with the Sapphire you get 2x on every single airline, every single hotel, car rental, and subways, parking, campgrounds, amusement parks—it's this huge category. So the dining includes everything from Seamless and Postmates to every single restaurant.
That's basically everything I spend money on besides rent.
Right. So, when tell this to New Yorkers—so much of our money goes to stuff like Seamless—they're [onboard.] So it's aligning your lifestyle with the right card. Plus, that card gives you 40,000 points just for getting it, although you have to spend $3,000 in three months. And the fee of $95 is waived the first year. So it's really just a no-brainer. Those 40,000 points, in my opinion, are worth about $800. You're almost at a ticket to Europe just from getting the card.
I never thought I made enough money to get a card with an annual fee. Am I making a mistake?
I think that's a really, really big point. And a lot of people in your position will say, "Fuck it. No annual fee. That's the most important." But cheap is expensive. These no-annual-fee cards are bullshit for the most part. In the case of the Sapphire, you're getting 40,000 points. Even if you just redeem those for flights, that's worth $500. And the fee's waived. So you've got more than five years of the annual fee paid for in just the value of the sign-up bonus, plus you're getting really good perks along the way. That being said, there are cards out there with $450 annual fees like AmEx Platinum and Citi Prestige, but those cards can also be a no-brainer. You just need to know how to maximize those benefits.
What else should I look for in a card?
Points and perks. So if you travel, the perks can be gigantic. Even with an airline card. Say you fly Delta all the time and gives you a free bag for you and a guest, if you travel twice per year, that pays your annual fee. So if you're traveling a lot and checking bags, it's a no-brainer. And you don't have to spend anything on the card. I have a bunch of credit cards that collect dust in a drawer because they have perks. The Hyatt credit card, for example, gives you a free night every year, and it's $75. So I get a free $250 night and it's $75. I'll do that every time.
I don't think I'm ever going to have twenty-plus cards like you, but if I want to have two, what should be the second one?
The second best card, I would say, is the Starwood Preferred Guest. It's actually a hotel program, but they have an AmEx where you earn one point for everything. Its hotel program allows you to transfer to 34 different airlines. The crazy thing is with Starwood Points, for every 20,000 points you transfer to an airline, you get 25,000 airlines miles. When you think about this, you're getting a built-in 1.25 airline miles per dollar spent, which is 25 percent better than the airline cards themselves.
And then plus you can redeem the points for hotels, and they now have an amazing thing called SPG Moments. A lot of hyper-travelers I know, when they use their points, they don't wanna use them for another fucking trip. So Starwood has brilliantly built out this program with VIP boxes at the US Open, at MSG, etc. So for 30,000 points you can get VIP box seats for a Knicks game. Basically travel and dining I put on the Sapphire because I'm getting double, but for everything else—clothing, and purchases where I'm not gonna get a bonus, I put on the Starwood. Across the blogosphere, Starwood points are the most valuable.
People are really, really good at this and there are tons of blogs like yours now. Are credit card companies just going to start hiring you guys away to make it harder for folks to cash in? Do you see these loopholes—for lack of a better word—closing soon?
Points and miles are multibillion-dollar industries. The credit card companies use these miles and points to get people to get credit cards, which is very difficult to do. Most people don't want to get a credit card, so you've got to incentivize people, and you can't give them cash, because then there's tax. Frequent flyer miles are a way to kick back your best customers and avoid taxes. The companies buy billions of dollars of miles from the airlines. In fact, AmEx bailed Delta out of bankruptcy by buying miles from them.
It's like an unregulated, international currency.
It is. But when people ask, "Is this gonna blow up soon?" It's like, no. Because everyone—the credit card companies, the airlines—are making money.
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