If someone offered you a way to take a free tropical vacation, you might think it was too good to be true. But Jon Hayes traveled to a tropical island for free. His global jaunts also include trips throughout South America and Europe, all taken for free or relatively little cash cost.
Hayes left a lucrative New York investment banking job to show others how they, too, could travel as he did. His Raleigh, NC-based startup, RewardStock, sets up users with credit card strategies that maximize rewards that can be redeemed for travel.
“All you have to know is how many points you have and where you want to go,” Hayes says. “We outline the best way to get there using points as the currency instead of cash.”
Though Hayes comes from a financial background, his work with credit card rewards is relatively recent. He credits his older brother for introducing him to rewards points strategies. In 2011, the elder Hayes suggested the two visit South America, traveling business class and staying in luxury hotels. Hayes was skeptical. “Even though I worked on Wall Street, I didn’t think I could afford that,” he says.
But Hayes’ brother had already earned enough reward points to finance much of the trip. He advised Hayes on strategies to accumulate points of his own. By the time they booked their travel, they needed just $200 for airfare and hotel—rewards covered the rest.
Hayes returned to his Manhattan finance job but continued the points-earning strategies he and his brother had practiced. In 2012, Hayes used points to take his mother to Europe on her first overseas trip. Hayes married in 2013 and honeymooned in the Maldives, the business class airfare and luxury hotel covered entirely by rewards points. Reflecting on the experience, Hayes concluded that software could have automated his rewards-earning strategies and made travel planning easier. Six months after the honeymoon, Hayes left his finance job to start RewardStock.
Consumers who sign up with RewardStock can use the site to store and manage their points balances. Based on the cards that an accountholder has and the points in hand, the software recommends strategies that can earn even more points. Those strategies include opening new cards. New accounts, Hayes explains, offer the most bonus points. Rewards programs are not created equally and Hayes says his company’s software can recommend which new cards will offer rewards that will best help a user reach his or her travel goal.
Rewards strategies do not necessarily entail carrying a lot of cards and spending a lot of money. Consumers can still accumulate a substantial amount of points with two or three cards, Hayes says. The software tells users the amount of spending over a period of time that is necessary to earn the desired number of points. Hayes is careful to note that RewardStock does not advocate excessive spending. Instead, he says, consumers accumulate points through targeted credit card spending on expenses they would be making anyway.
Consumers are leaving a lot of rewards points on the table. Colloquy, a research firm focused on loyalty marketing, counted 578 million members in credit card reward programs in 2015. Of some $48 billion in rewards value issued annually, $16 billion goes unredeemed, according to a 2011 Colloquy report.
A number of credit card reward apps have emerged in recent years to help consumers earn, manage, and redeem these points. The biggest of these might be Pasadena, CA-based Wallaby Financial. In addition to offering its own app, Wallaby’s software powers points management tools offered by CreditCards.com, WalletUp, and The Points Guy’s TPG to Go app, says Wallaby co-founder and CEO Matthew Goldman. Credit card users interact with the technology as a consumer-facing app. But Goldman says Wallaby is a big data company.
Wallaby, which was acquired by Bankrate (NYSE: [[ticker:RATE]]) in 2014, two years after the app’s launch, maintains what it claims is the largest
