Money Rehab with Nicole Lapin - Change Maker: Brian Kelly, The Points Guy, on Post-Pandemic Travel and Going to Europe for Free

Episode Date: May 28, 2021

Meet the guy who wants you to travel for free: The “Points Guy”, Brian Kelly. Discover the perks of points and how to maximize the value of cash back cards, airline miles and more. Plus, Brain covers the shocking (and costly) mishaps your card just might reimburse you for! Quick disclaimer: this episode is not for listeners who have a plastic problem because Brian Kelly *will* convince you to open up a new credit card. Have you been wondering how to get the most bang for your buck now that travel is reopening? Can you guess how many credit cards The Points Guy has? Listen to find out!  Read more about Brian’s work here: https://thepointsguy.com/ Learn more about your ad-choices at https://www.iheartpodcastnetwork.com See omnystudio.com/listener for privacy information.

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Well, it doesn't. Charge for wasting our time. I will take a check. Like an old school check. You recognize her from anchoring on CNN, CNBC, and Bloomberg. The only financial expert you don't need a dictionary to understand. Nicole Lappin. As you know, every Friday we talk with a public figure making change in every sense of the word.

And along the way has been in or might still be in money rehab. So today I'm talking with Brian Kelly, a.k.a. The Points Guy. Yes, you heard me correctly. Today we Kelly, aka The Points Guy. Yes, you heard me correctly. Today we are talking to The Points Guy. Brian is one of the very few people in the world, this is not hyperbole, who is fluent in the language of credit card. He knows absolutely everything there is to know about the best deals on credit cards, how to choose between loyalty programs, and which sign-up bonuses are actually worth it. And now that things are opening back up and travel feels a lot safer,

I want to know how the decline, or rather crashing halt, in travel has changed loyalty programs and how I can get the most bang for my buck on my next trip, and you can too. So Brian, or should I say the points guy, welcome to Money Rehab. It is so good to hear your voice, Nicole. We always have such a good time and I feel like us being together today is us getting back to normal. So much. I swear that we saw each other right before our birthdays. And yes, in that time, I got a puppy. I birthed a show. You know, you have been all over the world. Actually, we should start.

The show starts with money rehab. Never have I ever. Okay. So are you ready? Let's do it. I'll be honest. I'm scared. I'll ask you a question about your finances and you can tell me if you have or you haven't made this money move.

Never have I ever leased a car. I have leased a car. But lately I buy like used cars. That's my boy. Never have I ever played the lottery. I have played the lottery. Yes. Never have I ever bought a house. I have bought a house. Never have I ever invested in Dogecoin or Doggycoin. I did invest in Dogecoin. I got it

when it was like less than a cent and I sold it when it was 6.7 cents. And I thought I was a genius in January. But the joke's on me because I think it's at 40 cents today or it was 50, 60. Who the heck knows? I never have I ever been in debt. Oh, I have been in debt. It's funny that I'm the points guy and credit card expert because in college, I got the University of Pittsburgh MBNA $4,000 credit line, maxed it out to go on spring break to Ireland. My parents, I had a panic attack. My parents, I was like, can you bail me out? They're like, no, you can take out a student loan. And then it really wasn't until I started the points guy in 2010. I was always kind of

month to month having a bill here, never really being able to like catapult myself out of the deck. So I was really dumb with my finances as a 20-something, but luckily that's changed. So my point is, if you're listening, you're not alone, and you can still have an almost perfect credit score in terms of points. You can get there, but you have to work to get there. So connect the dots for me. How did we get to the points guy? I had two job offers. One was to be in Pittsburgh, stay there. But I was going to be making like 80 grand a year, car, living a big life in Pittsburgh. But I was not out of the closet yet. And I just, I knew like New York City was my North Star. So I got a job at Lord & Taylor and I took that job just to get to New York.

Now I'm like living paycheck to paycheck. There was a time at Lord & Taylor where we had to wear a suit every day to work. And I would wear my suit like 20 times because I didn't have money for dry cleaning. All my friends in finance were popping bottles and neat packing. Everyone was rich, but I was the kid in HR and fashion. So I would be out to dinner and be like, please, God, do not have this split. Let my rich friend pay. So I hustled my way into Morgan Stanley in August of 07. I got on their technology campus recruiting team, flying all around the country and Canada, spending a ton, entertaining. So all of a sudden, I realized I could get Amex points for all this. And that's when I became a points millionaire. I wasn't making a lot of money. And then of course, in 08,

we all know what happened in finance where it was crazy. But luckily, I never lost my job. But every year they were like, you're promoted, but your bonus is not getting fired. And so I was still kind of living on a shoestring. Not as bad as before. My ex actually said, Brian, you help all of our friends use their points. Like I've just been a whiz. He's like, you should do a side hustle where you charge people, stop doing it for free. So the points guy was a side hustle. It wasn't even a blog at first. And it was a form where you would pay me 50 bucks and I would tell you how to use your points. So for example, I remember my boss at Morgan Stanley was like, Oh my God, I used 400,000 points to get a Weber grill, which was like two thousand dollars. And he thought he would beat the system. Right. But I'm like four hundred thousand Amex points at that time was for business class tickets to Spain, which he had just told me he paid for it because he couldn't didn't.

You know, and I'm like, so you got some two thousand dollar value on a grill. You know, you're getting half a cent per point in value. Generally, like Amex will give you less than a cent per point when you redeem for gift cards and merchandise. But you can get two, three, four, five, six cents on travel. But even so, say he didn't even know that, like he should just use a cash back card that gives you 2% back on everything. Because what he was doing was earning one cent and then redeeming it for like a half a cent each. So instead, he could be earning 2% cash back. So you're getting two cents for that dollar versus the half a cent that he was doing at the rate he was going. Plus, he's paying a $500 fee on that credit card, that platinum.

So you're coming out way down, buddy. And it was that time. A friend of mine was like, blogging is all the rage. Fashion is being uplifted by bloggers. Travel probably will too. And he just said, write a post every day that's really good. It doesn't have to be super long, but how do you useex points to go to hawaii france whatever it is and he's like people will inevitably like find your site and so that's those june of 2010 was my first

blog post and then it started to go viral that fall and then in the spring of 11 all the credit card companies apparently were reading my site a month or or two later, it just blew up. So it was like nine months after my first blog post, I quit my job at Morgan Stanley. And everyone, my mom, my best friends, everyone said, Brian, it's not real. Luckily, they were wrong. And it just blew up from there and continues to just grow outside my wildest, wildest dreams. How do you think the pandemic changed credit card loyalty programs? Well, so the credit card companies quickly had to pivot because lounges were closed, you know, especially the premium credit cards where people are paying $450. They're not traveling, they're not getting their Uber credits, you know, they're stuck at home. So very quickly, like,

you know, all the major issuers made it more fluid and flexible to use points. For example, Chase Sapphire, normally, it's only like one and a half cents per point on travel when you redeem for flights or hotels. However, they opened that up to groceries and dining and seamless. So it became a lot easier to use points. And now it's up to consumers to use them because what's happening is there are so many points, the system's been pumped full and no one's been redeeming. So what that means, and flights have been canceled. So it is challenging to get three cents per point in value

because you can't even go to Europe today. So the whole system is kind of out of whack. And what's going to happen is that airlines, every single major airline sold billions of dollars worth of what's going to happen is that airlines, every single major airline, sold billions of dollars worth of miles and points to the credit card companies. They all essentially mortgaged their loyalty programs to get cheap financing or cash to help them ride out this pandemic. So what we've seen is just like the market has been inundated with points. Everyone has them. But guess what? They're going to devalue because there simply aren't enough flights for all these trillions of new points to be redeemed on. And we saw that recently.

Southwest Airlines recently overnight, they just said, well, we're going to decrease the value of our points by 6% with no notice. So instead of being sad about that, I just urge everyone, have a strategy. Your points are valuable, but use them, especially since the airlines, you know, during the pandemic were, OK, great. Change fees are free. Anyone you can change any flight. Great. But what they just did in May of this year, they now charge fees on basic economy tickets. And what do most consumers buy? The cheapest damn ticket they can see. So consumers now can't change their tickets for free, even if there's a COVID outbreak or whatever. Now, some airlines might be nice, but the difference is with your points, you can get full refunds on your points tickets and get your cash back. And even if you do buy

a changeable ticket, you're not getting your cash back. You're getting a voucher for future use. Your money's tied up. With points, A, you save the cash from not having to lay it out to use it, and you get full flexibility. So that's what I want people to realize. Even if you're not getting the most amazing value, if you've got all these points saved up, they're not going to get more valuable over time. So you might as well use them now and put that cash elsewhere. We'll be right back for some more money rehab. Now for some more money rehab. What do you think the best kept secret is when it comes to loyalty programs? So what happened during the pandemic was the credit card

companies all of a sudden stopped, not issuing cards, but they stopped really promoting cards because they were, you know, worried about 30% unemployment, depression. You know, we remember all the, we had no idea what was happening. So basically, all the credit card companies were like, whoa, pump the brakes, very low sign-up bonuses, et cetera. Now that the economy is roaring again, we're like hopefully on an upswing, all the credit card companies are now battling it out for top consumers. So if you even have a decent credit score, like 680 and up, you can get most credit cards. The sign-up bonuses are the highest I've ever seen in my life. So you can get 100,000 points just from getting a single credit card. You can get a credit card for the signup bonus that's over $1,000 in value. You can take an entire trip for a single signup bonus. In addition to all those points you get for signing up, you get a bunch of perks as

well. People don't realize they're amazing with customer service. And I've helped friends who like lost their sunglasses off a boat. I'm like, call Chase right now. And every almost every card has purchase protection. So even if you mess up, like many of these cards will, you know, in the spirit of like helping their consumer out. And the beauty of it is you don't have to go and do the research yourself. Like if you Google right now, the best credit cards for cell phone insurance, like if you scratch your iPhone, there are so many credit cards that will immediately reimburse you to fix it. And the best credit cards for insurance while renting a car. So teach yourself. You may already have sufficient coverage with your credit card or your car insurance policy.

So many people pay that crazy amount with the credit card companies because they're like, or with the car rental companies because they're like, let me just be safe. But like you're losing out by not using the right cards for the right purchases. And when you open up cards to get these signing bonuses, what do you suggest to do after? Like, can you cancel right away? I don't want to have 50 cards, Brian. So I don't think you should cancel right away. If you just sign up and cancel, the credit card companies get onto that and they say, well, because these side of bonuses cost the credit card companies huge amounts of dollars. So what I would say is also look at the perks you're getting. It may make sense to keep that card

if it's going to give you triple points on travel and dining or something that you spend a lot in ongoing. If you can get more than the annual fee, then it makes sense to keep it. But if for some reason you don't want to keep a card, what I recommend is downgrade to a no annual fee version. And the reason for this is your credit score, the two biggest parts of your credit score are you paying your bills on time and then also your debt to credit ratio. So in a perverse way, the more credit cards you have, the more available credit you have, and the less you use every month, that's when your score goes up. That's like the real key to credit. So if you only have one credit card, and it's got a $5,000 limit, and every month, you know, you spend 3000, you even if you paid off on time, a lot of times they report your balances before

you even it's your due date. So it's very complex. But bottom line is people in my world who I've talked to, you know, get six, seven, eight, nine, 10 credit cards. I personally have 25. It's different for me because they're a business expense because we need to have them. And we actually give a wave for our TPG employees on the editorial team. They get free credit cards as well because we write about them. But even so, basically make sure you're getting value from the perks or the points. And if you're not, just downgrade it to no annual fee because you also keep your age of accounts longer by not canceling. And you don't get on the crap list of the credit card company because if they peg you as a gamer, someone who just opens, closes, open, like, get out of here. We don't want you as a customer. And you will get banned from banks

if you do it really egregiously. And don't bite off more than you can chew. Because if you apply for three credit cards and each has a $5,000 minimum spend to get that bonus, and then all of a sudden you're like, oh my God, I need to spend $15,000 that I wasn't going to spend, you're now losing the game. So slow and steady wins the race. Look at your credit score and educate yourself on how credit works. But the joy of it is when you get it right, you can build a huge points net worth all while increasing your credit score while doing it. And as we all know, an increased credit score gets you better mortgage rates and other things. So it's a whole strategy. Your point strategy should be increasing your financial well-being in general versus bringing it down. And never reject a credit increase.

Just don't use it. Yeah, if they raise your account, don't call and say, don't give me it. Unless you're like tempted to use it, right? But the more credit you have available, it helps you. It's, you know, people think, oh, well, the credit card companies will get mad because, you know, I'm not using all the credit. It's just not the case. If you leave an account dormant with no charges for like two years, a credit card company may, you know, they may do a sweep and say, well, why are we holding the liability if this person is never using it? We could be giving that credit line to someone else who's going to make us money.

So I don't recommend just leaving tons of accounts dormant. You could put like a regular bill on it or something. Totally, yeah. Like your cable bill. And have it auto pay so you never miss a payment. That's another key thing. And I know everyone asks you this all the time, but I know the answer always changes too. What are your favorite cards and loyalty programs these days?

So I really like the Amex Gold. That was my pandemic card because all of a sudden I'm actually food shopping. You know, for the first hundred days I didn't get on a plane, which was really nice, actually. So that's 4X on dining and groceries. Chase Sapphire Reserve is still a strong one because it's triple points on all travel, all dining. And travel includes not just airlines, hotels, but tour operators, you know, mass transit, parking tolls, especially now a lot of us have cars. So get a card that like, you know, has a gas category. If all of a sudden you're spending a lot on that and, you know, as a base card,

the Capital One Venture is double points on everything. And those points you can transfer to airlines, but you can also wipe off charges. So say you go on a girl's weekend and you rented an RV, you can use your capital and venture points to pay for it as long as it codes as one of their travel categories. So everyone looks at airfare and hotels as the main cost, but these days, rental cars and Ubers can be way more than your flight ticket. So using these flexible points to kind of wipe off charges is nice because you can maybe use your Amex points for airfare, but then your Capital One to pay for the Ubers. And here's a tip from Brian you can take straight to the bank. If you shop online, which almost all of us do, always make sure you're shopping through a mileage or cashback shopping portal. For example, if you go to AdvantageEShopping.com, that's Americanback shopping portal. For example, if you go to advantageeshopping.com,

that's American Airlines shopping portal, you put in your frequent flyer number, it puts a cookie on your computer. And then you know, I shop at Neiman Marcus, I got 10 miles per dollar spent during one of the promotion periods, I value advantage miles at two to three cents a piece. But what that means is 10 miles per dollar and each mile is worth two cents. I'm getting like a 20% rebate. But by the way, even if they have a sale, you still get the sale and coupons. You still get the airline miles through the portal. And then you still get miles for using a credit card that earns points. So it's like a triple dip. And at the pointsguy.com, we have guides and then beginner's guide, and it will take you

through step by step. So it may sound daunting, but it's not. I think the first step is just saying, I want to get on this points game. That's it for today's episode. I'll see you next week for some more Money Rehab. Money Rehab is a production of iHeartMedia. I'm your host, Nicole Lappin. Our producers are Morgan Lavoie and Catherine Law. Money Rehab is edited and engineered by Brandon Dickert with help from Josh Fisher. Executive producers are Mangesh Hatikader and Will Pearson. Huge thanks to the OG Money Rehab supervising producer, Michelle Lanz, for her pre-production and development work.

And as always, thanks to you for finally investing in yourself so that you can get it together and get it all.