The Credit-Card Kingmaker

By AnnaMaria Andriotis 

A recent party in Manhattan had the trappings of a hot ticket, including a red carpet, a drag queen and a former "Real Housewives" star. But the 500-plus guests were celebrating something that doesn't usually evoke glamour -- credit cards.

The master of ceremonies: Brian Kelly, who not so long ago was a human resources employee and is now one of the most powerful people in credit cards. Mr. Kelly, who for a portion of the evening donned a jacket fringed with 100 fake plastic cards, is founder and CEO of The Points Guy, a website that reviews rewards cards.

Mr. Kelly, 36 years old, has the attention -- and money -- of some of the largest U.S. banks, including JPMorgan Chase & Co., Bank of America Corp. and Capital One Financial Corp. Reviews on The Points Guy, known as TPG, can make or break a card. Banks pay to advertise there and some seek his input before launching new products. The banks also pay TPG when its readers get their credit cards.

That has created a symbiotic relationship between Mr. Kelly and the banks. TPG's financial success depends largely on the banks continuing to pay. The banks pay up because they are attracted to TPG's large readership. More than 10 million people visited the site in January, and nearly half were first-time visitors, according to Mr. Kelly.

Complicating the relationship is the fact that rewards cards themselves haven't been the moneymaker the banking industry was hoping for -- and that is in part because of Mr. Kelly. TPG helped spawn a broader ecosystem of customers who swap tips online about how to game the system, wringing rewards out of cards before abandoning them, and some banks are discussing how to cut back on rewards to trim costs.

Still, banks keep competing for rewards customers. Banks spent an estimated $4.5 million in banner, display and video advertisements on TPG in the fourth quarter of 2018, double from a year prior and more than triple from two years prior, according to Mintel Comperemedia's analysis of data from digital-marketing intelligence firm Pathmatics. Roughly three-quarters of that came from American Express Co. and JPMorgan, according to those industry estimates.

TPG ranked as one of the top five websites where banks spent most of their ad money for credit cards last year, alongside Facebook, YouTube and others, based on Pathmatics' figures, said Pathmatics chief marketing officer William Merchan.

Mr. Kelly started TPG as a hobby in 2010, while working in HR at Morgan Stanley. He had credit-card debt and little savings, but had amassed hundreds of thousands of points on his corporate credit card that he was able to use for personal travel. Initially, he charged people $50 to help them book flights using their points.

In 2011, banks started paying TPG when readers visiting the website applied for and received cards.

His first big payday came that year. The JPMorgan British Airways credit card was offering 100,000 points to certain new cardholders. Mr. Kelly advised readers against redeeming the points with British Airways and to instead redeem them for travel on airlines where the points were worth more. Readers rushed to sign up for the card. About a month after posting stories about the card, Mr. Kelly said, he made more than $70,000 -- topping his annual salary at Morgan Stanley at the time.

Mr. Kelly sold TPG in 2012 for an undisclosed amount. It is now owned by Red Ventures and has about 60 full-time employees.

Mr. Kelly says none of the reviews TPG publishes are paid for by banks, airlines or hotels. He also says those companies don't pay for his or his staff's travel. When TPG buys ads on Facebook and Google -- at times spending as much as $1 million a month -- they are billed to Mr. Kelly's business credit cards, and he says he uses the points he accrues to pay for his and employees' travel.

Mr. Kelly is often on the phone and in meetings with employees from JPMorgan, AmEx, Capital One and Wells Fargo & Co., among others. Some banks consider his advice when they are preparing new cards or changes to existing rewards programs. For example, Mr. Kelly recommended for years that Capital One allow for airline transfer partners, where cardholders can use their points at a number of airlines. In November, after considering additional input from customers and others, Capital One announced the addition of such partners on some cards.

One of TPG's biggest bank clients is JPMorgan. A turning point for the website came when it helped the bank launch its Sapphire Reserve card in 2016. Mr. Kelly recommended a live online Q&A session with a senior bank executive and other coverage. TPG earned millions of dollars from the card in the months after it was introduced, as droves of the website's readers signed up for it.

Mr. Kelly's Instagram account highlights a lifestyle of high-price travel that rewards cards can pay for, boasting photos of him in a hammock in Bora Bora and views of Cape Town from a luxury hotel.

His Manhattan awards party -- which showered accolades on categories such as No-Fee Card of the Year and Best Hotel Loyalty Program -- attracted guests such as figure skater Adam Rippon, Nobel Peace laureate Leymah Gbowee and pop star Bebe Rexha. For more than an hour, bank executives and their counterparts from hotel chains and airlines took to the stage to accept awards.

The price tag for the black-tie affair was about $1.5 million, according to a person familiar with the matter. TPG paid about $250,000, the person said.

The banks and hotels paid the rest.

Write to AnnaMaria Andriotis at [e-mail]

(END) Dow Jones Newswires

March 24, 2019 10:14 ET (14:14 GMT)

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