The Points Guy: Airlines Make More Money Selling Miles Than Flying Planes

0:01Neal Freyman:Are you sucking wind from trying to keep up with AI and its impact? Take a breather and tune in to the Intelligence Shift, Morning Brew's new podcast with PwC. It bridges the gap between big picture AI concepts and what it actually means in practice. Host Dan Priest is joined by expert guests to discuss AI's role in sports, music, HR and more. Listen to the Intelligence Shift wherever you get your podcasts. We're living in the platinum age of travel. It's like all about loyalty. Loyalty is what these airlines make more money. The big airlines make more money selling miles to credit cards than they do flying airplanes.

0:35I want everyone to let that sink in. The airlines make more money from their loyalty programs. Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, we're talking points, credit cards, and travel with The Points Guy.

0:48Neal Freyman:You're going to want to hold off on booking that August vacation until you listen to this. It's Thursday, July 2nd. Let's ride.

0:59Good morning. No standard news show today since the office is closed ahead of July 4th. But we may have something even more useful for you. An interview with The Points Guy. Brian Kelly, a.k.a. The Points Guy, reinvented the conversation around credit cards, helping millions of people save money and travel smarter by accruing points. So we talked to Brian about points because that's interesting as heck. but also about the latest in the travel industry because this guy is pretty much always on an airplane or in a hotel.

1:29Neal Freyman:We also got into a philosophical debate about what being a window or an aisle person says about your character and whether you should dress up when going to the airport. It is a fun conversation, but first, a word from our sponsor, Ultra Running. As some of you may know, I'm running the New York City Marathon this year. Copycat. What was that? Oh, nothing. You just want to be me so bad. I mean, I run the marathon. Now you're running the marathon. Everybody sees it. Anyway, for anyone else joining me, check out Altra. They actually make shoes shaped like feet. What a concept. Most running shoes are narrow at the toe, but Altra has more room for your toes so they can spread out and your feet can stay in a natural position.

2:13Neal Freyman:The Altra Fit is designed to give you room for your toes for comfort, balance, and strength, and no one's copying them. Use promo code morningbrew10 for 10 % off your first pair of ultra running shoes at ultrarunning.com slash morningbrew. That's A-L-T-R-A running.com slash morningbrew. Now here's the points guy. Brian, thanks so much for joining us. Thanks for having me. All right. First question. How did you become the points guy? Well, it started in 2010. I was working at Morgan Stanley. I was there 2007. I got a job there doing recruiting. So I was in college recruiting for technology. Of course, it was like six months after I started, the bottom blew out of the entire financial industry.

2:58And so I spent years working there. I actually was getting promoted. But if you're in HR during the Great Recession, like you're a nobody. And I think I remember my managing director would look at me and laugh and be like, your bonus this year is not getting laid off. Come back again next year. So, you know, I'm in my 20s, New York City, just trying to get ahead. I've always been really good at points. I started doing it with my dad in the 90s. So really before the points guy, I was the points kid. He was a road warrior. I figured out when I was 12 how to use his points. So that's like the shortened version of I had been doing points in the 90s, figured out in college when I was student body president traveling that there was like this whole underworld of travelers.

3:38So pre-Reddit, it's still around called Flyer Talk. So I discovered Flyer Talk in 2004 and like, holy crap, This stuff that I've been doing with my dad, there's like people around the world that do this. So I was into the points game. Then I get a job at Morgan Stanley where I'm traveling nonstop. And mind you, 2008, 2009, even though it was a crisis, this is when Microsoft, Yahoo, Google, they are competing for top tech talent. So even at Morgan Stanley, like my job was to convince the top grads. And so they basically gave me a corporate AMX with no limit and was like, do whatever you need to do.

4:12So not only am I traveling, I'm spending tons of money on my corporate Amex, learned that I could pay$100 a year to get those points. So I was like broke but points rich, and I was traveling the world jet setting. And finally in 2010, after another year of like no increase in wages or whatever, I started the points guys like a side hustle. So it was not a blog at first. It was just I was a travel agent for points. I was helping people all the time book trips and save them thousands of dollars. my friends were like, you should charge people. So I started just charging people 50 bucks a ticket, you know, come home from work, do my little travel agent thing.

4:50It was like a couple hundred bucks or a thousand bucks, which was helpful. I started blogging. A friend of mine was like, you, this is 2010. He's like, you have to blog. He was like foaming at the mouth. He was an SEO expert, which at the time I had no idea what that meant. And, um, it was like 2011 is when I kind of stumbled into affiliate marketing and that changed my life and overnight. How was the concept of points change from when you started in the 90s and 2000s till now? Was there like an inflection point? Was it like the Chase Reserve, that card that had this crazy intro bonus that everyone seemed to jump on?

5:22Well, it's funny. I joke that we're currently in, you know, the golden age of travel was the 60s and 70s, the age of jet travel. I joke that we're actually starting from 2010 onward. There was this huge shift. You know, pre-2010, Chase launched their Sapphire Preferred in 09 very quietly and actually promoting the preferred, which is, you know, the$95 a year card. That was actually one of the ways that I was able to leave wall street because no one knew about the preferred chase had poached a ton of Amex and chase came up with this. Hey, let's go head to head with Amex Amex for many years was the ruler of all things like, you know, premium credit card transferable points.

5:59So talk about being right time, right place here. I am as blogging as a form of influence really starts to arise. The Points Guy, my main audience was, you know, consultants, you know, millennial consultants who were traveling and spending big and were future high earners, right? And that's what the banks wanted to get in front of. To answer your question, it's funny because at every point in time, every year, there's always so many people saying points are dead. In 2010, when I started the Points Guy, which as we have foresight now to look back, things were actually really great, but people called it dead.

6:31Blackout dates. You know, you can't use points anymore. All these crybabies. And when I started the points guy, I finally was like, okay, all these moronic travel experts who don't even know points going on Good Morning America saying points are dead. It's all blackout dates. It was actually the heyday, but people just needed to learn how to let, you know, in the airline websites, I mean, in 2026, they're still broken. In 2010, you couldn't really book awards. So it was complicated, But there has always been opportunity for those who decide to spend a little bit of time and learn the system. And that is the same today.

7:06Today, I would argue that it's the platinum age even better because you can now earn points on rent, mortgage, all of these crazy categories that we could only dream about in 2010. So the industry is evolving. At the same time, there's inflation happening. So if you just look at one piece of the points puzzle, you might say, oh, flights today are just so much more expensive. It's not worth it. but that's not the case. You just need to work a little bit harder.

7:30Neal Freyman:If you could go back in 2010, like right when you first pressed publish on your first blog, what would surprise you the most about what the industry has turned into in the ensuing years? I mean, there's just incredible competition. I mean, the fact that today we've got Chase as a behemoth, you know, and, you know, the Sapphire Preferred helped launch the points guy. And in 2016, because I had been working with Chase for years as a trusted partner, the points guy was the exclusive launch partner for the Sapphire. I knew about that product months in advance, and we worked with them to make that viral.

8:06It ran out of metal. It's a Harvard business, you know, case study today. Wait, wait, wait. I can't believe I never got that card. No, no. I want to hear about this. They ran out of metal story. I don't know. Yeah. It was so popular. I knew, you know, Chase, the Sapphire Reserve blew up the industry in that how lucrative it was. triple points on travel and dining when it launched in 2016, 100 ,000 point bonus. Chase points are really valuable. One-to-one transfers to Hyatt, to United, to all these really rich partners. And so many people got the card that Chase ran out of metal. So there was a population of people that were getting a plastic card.

8:43And part of it's called in the industry the plunk factor. Now we all use our digital payments. But in 2016, if you got your hands on the Sapphire card, at that point, Platinum, they also switched to metal after everyone else was getting into metal. But the Sapphire card, it was the cool card to get, triple points on dining. I mean, it was the cultural moment. So there was a small portion of people that got the Plastic card, and they were livid. Low plunkability, yeah. The plunk factor. So short answer is I would be shocked at just how many options there are today. And it is still a bonanza for consumers.

9:18So if you're listening to this, do not think the points game is over. It is just evolving. Yeah. So fast forward to today, we have Amex and Chase in a full-out arms race. They're charging nearly— Capital One. Capital One, too. Capital One. You know, in 2019, they started doing transfer partners. You know, Built and Cardless. Built has built up a huge—and full disclosure, I'm a Built advisor investor from the beginning. But Built has completely opened up a new market. Uh, we also have, I mean, Wells Fargo is still in the game city city launched a premier card, the strata elite to, so, I mean, there is a bonanza and no, you know, if you play your cards, right, you know, you can get crazy bonuses on every aspect of your life, including, you know, rent and mortgage, which to me, I never thought there'd be a day where there'd be a credit card where you can earn on rent or mortgage without paying that fee.

10:09We're seeing, speaking of fees, we're seeing annual fees reach almost$1 ,000 for these premium credit cards. Do you think there's going to be an upper limit to what people are willing to pay and then go back through what they call the coupon book to figure out how they can actually see those rewards? You know, I don't have inside numbers from the Amex and Chase, but if we look at their, you know, public quarterly reports, they seem to be doing quite well. And my sense is that even though the increases in annual fees, people are paying them. I mean, I see it in the lounges. There's lines outside those lounges.

10:39There's no shortage of people paying. I do think what they're dealing with now is trying to cull it a little bit. You know, it has gotten harder. You can't take guests in like you used to be able to just because they need to manage. They can't just continue to make. You can't create more real estate in an airport. So I think the market will market. I know some people who are getting rid of one of those cards. And I say to people, you should. You should always be taking stock of like how much value you're getting. But I would argue most of these cards, it is not that hard to get the annual feedback, especially if you go to the lounge a couple times a year.

11:14And what I have to encourage people, too, it's not just the points you're earning, but it's also on those premium cards, the customer service. When anything goes wrong, you know, the Sapphire Reserve card, if you have a six-hour delay, you get$500 a person. Go get a hotel room or if it's an overnight delay, you don't have to beg for the, you know, Motel 6 or whatever. You know, from the airline agent, your credit card has all these crazy perks and built in. So, you know, I still don't, just because the fees are going up, it doesn't mean that most people can't easily get the value back. Especially when you consider there's 100 ,000 plus bonuses on these cards that even if you did nothing would pay for the annual fee for several years.

11:54And mind you, like this only exists in America. We are in the greatest land of all for credit cards. And I want people, I think sometimes people forget how good we have it. talk to any of your friends around the world, there is no more lucrative credit card ecosystem than the US. Basically, if you're not using a credit card and earning points, like you're helping fund it for everyone else. So get off your ass and get in on the game. We have a couple of questions about the airline industry, which you are familiar with. Did Southwest deserve all that criticism for starting to charge for bags and ditching their open seating?

12:26Well, look, I think any customer can voice their concerns, but I mean, the results are rock star, right? It is, you know, Southwest had free bags and they were giving away the bank. And the airline business is a tough business. Now, don't get that. I'm not a fanboy of the airlines. And I think they do a lot of messed up things. But when we live in a capitalistic world, airlines are owned by shareholders, like their obligation is to their shareholders. It is, you know, people are willing to pay and people just want cheap tickets. So, you know, The airline consumer, airline economics are really interesting.

13:00While people say, no, we want full service, no, people want cheap-ass tickets, period. Like the customers, by and large, have been, are focused on, especially on non-premium airlines. Now, for premium, premium passengers are different, right? So if you're going to actually invest in a premium product like Delta and charge a premium, but Southwest can't do that. Southwest doesn't have first class. They don't have lounges. They're not going to be able to charge for premium. So they need to be able to charge for other things in order to compete because costs are going up. But people are really weird on the budget side with the Airford.

13:31They're not paying this premium for Southwest. So they had to figure out a way to kind of get some revenue without being able to charge the premiums like Delta and United.

13:38Neal Freyman:Speaking of the budget side of things, what are some of the takeaways from the spirit implosion? Yeah. I mean, it's a reminder. We're living in the platinum age of travel. It's like all about loyalty. Loyalty is what these airlines make more money. The big airlines make more money selling miles to credit cards than they do flying airplanes. I want everyone to let that sink in. The airlines make more money from their loyalty programs. So what airlines are doing the worst in the U.S. right now? You know, Spirit had a horrible loyalty program, did not focus on premium, terrible brand. And in the end, you know, this game is not, it's expensive to fly into LaGuardia, increasing costs, increasing jet fuel.

14:18So during a crisis, all of these airlines have leaned on their loyalty program to survive. During the pandemic, Hilton, you know, even the credit card airlines all sold billions of dollars of future miles to live. So the story is you've got to get in on the loyalty game. JetBlue is struggling. JetBlue for years had a snooze fest of a loyalty program. Their co-brands are way behind. The customer in the U.S. is sophisticated. You can't roll out a crap loyalty program and credit card and just expect it to be what Amex has built with Delta. The Amex Delta co-brand portfolio is incredible. They pioneered.

14:54They have the highest margin. And I've heard stats that 1 % of US GDP is put on a Delta Amex card. But they have done that. It has been a decades-long investment. And so the airlines and companies out there who are not investing in loyalty, you are setting yourself up for failure, in my opinion. So we just heard you say spirit is gone. JetBlue is struggling. So if I'm somebody who's like, I love being able to fly down to Fort Lauderdale from Boston for$70 and all these discounters are struggling mightily or going the way of the dodo, where does that leave me as someone who is looking around for cheap flights around the United States?

15:32And I see United and Delta moving more into premium. Where does that leave me? Yeah, I'd say there are still cheap flights to be had. When you look at it, just adjusting for inflation, effort is actually not that expensive, even internationally. Like you can easily fly to Europe for$500, you know, if you know how to search for airfare. So the first thing, you know, there's so many fake influencers now on, you know, doing TikToks like search on a Tuesday at midnight. All of that is BS.

16:00Neal Freyman:So that is BS, by the way? What about incognito mode? Incognito is not going to do it. What will really actually bring prices down is if you're an international traveler, if you can start your trips abroad. For example, if you have family in South Africa and you go every year, Newark to Joburg is like$9 ,000 round trip. But if you go Joburg to Newark, round trip is like$3 ,800. So this is what we call positioning flights. So if you can use miles to start every trip from Joburg, you're saving like a third, right? So if you, or even in the US, flying New York to Paris, it's a bunch of rich people that fly that route.

16:38Bankers, lawyers that are paying full fare. Air France isn't discounting business class on a route where they are making so much money. But if you go from like Albany, connect to JFK to Paris, that flight is way cheaper because they price it based on the starting city and the end city. So doing positioning flights, flying out of other airports, that's really where you're going to get great deals. But learning how to use Google Flights, free tool, google.com slash flights. This is what I tell people. Let technology start searching for the deals for you. If you want to go to Europe this summer, there's still great deals to be had.

17:14But if you use one data set like New York to Paris on July 4th, you're not going to necessarily find all the deals. So in Google, they have an explore. Click the explore tab. you put in your home city, and then you just put in Europe or Caribbean. Say you just want to get away to the Caribbean for a weekend. It'll show you, you know, you can go, I want to go for a weekend in February, show me the cheapest flights from New York to the Caribbean. I just want to go somewhere warm. It'll show you a map and you can do nonstop business class and then sniff out. Sometimes Turks and Caicos I've seen is like 280 bucks sometimes just because, right?

17:46Like go to Turks instead of Anguilla, which is 4x the price and save that money. So, and then setting alerts, Even if you don't find anything good, set alerts on the routes you fly all the time. If you fly home to see family. So be opportunistic, but use technology. I still believe in general, airfare is pretty affordable considering you can travel around the world. You know, everyday people can travel.

18:08Neal Freyman:We're going to take a quick break, but come back with more Brian Kelly right after this. Hey, Toby, how's your duck impression? It's not all it quacked up to be. I refuse to engage with a joke that hack. Okay, then I'll talk. Aflac pays employees' claims fast, accurately, and fairly, and their plans come at no direct cost to businesses. Plus, they help save employers and employees tax dollars when payroll deductions are withheld pre-tax. That's why nearly all businesses that offer Aflac say they're likely to continue. To learn more, just head to aflac.com slash morningbrewdaily. That's A-F-L-A-C dot com slash morningbrewdaily.

18:49So, Toby, after starting the workday at 5 a.m., how much energy do you have left at the end of the day to figure out dinner? Toby, wake up.

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19:41Neal Freyman:Plus, get free delivery on appliance purchases of$398 or more, no membership required. Upgrade your kitchen with a modern and sleek GE profile refrigerator featuring hands-free autofill for the perfect pour every time. And make laundry day easier with two-in-one washer-dryer combo innovation that completes laundry in about 90 minutes. Shop top brand appliances now at The Home Depot. Offer valid June 17th through July at the U.S. only C-Store online for details. People are listening to this probably on an audio podcast and they don't know that the points guy is more of like a points man and that you are 6 '8".

20:14Neal Freyman:eight inches tall. 6 '7". 6 '7". Give or take. I was trying to not make the kids, you know, do the 6 '7". 6 '8". I'll round up for you, 6 '7". What is it like being a travel influencer when you're that tall? Well, you know, that's why I became the points guy because I at least needed the exit row. I physically do not fit in a normal seat. So me playing this game, going back to college, I remember I flew to Europe my first study abroad trip. I didn't know any better, and I was in a normal seat. And I remember I had NyQuil on me, and I was just like chugging NyQuil. I'm like, just like, please make this flight.

20:46And someone of course reclined into my knee. And I'm like, so I was like, I got to figure out how to get the better seat. So originally it was just like, how do I get exit rows? And, but funny enough, you know, a lot of, I don't fit in a lot of business class and this is a warning to anyone out there. So especially once you start playing the points game, business class will become available to you. And once you start turning left on an airplane and once you start sitting in business and don't get me started on first class because the international first class, like on Emirates, where you can take a shower, they have unlimited caviar, unlimited Dom.