The founder and CEO of GigaPoints shares how his company helps consumers reap the most benefits for their personal spending habits.
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If you’re looking for a new credit card, the founder and CEO of GigaPoints hopes his algorithm can help you. Erik Budde is a Silicon Valley-based entrepreneur whose passion for travel and personal finance made him the “go to” when friends needed credit card recommendations. Building on his track record of successfully bootstrapping companies, Budde started GigaPoints.com in 2019 to help all consumers find the cards that reap the most benefits for their personal spending habits. Budde’s previous wins include RothIRA.com and AboutAirportParking.com. He sat down with JessicaAbo to discuss what people should look for when choosing a credit card.
Jessica Abo: Erik, what were you trying to solve when you set out to create GigaPoints?
Erik Budde: It’s hard to pick a credit card. There are hundreds of choices. It’s kind of confusing about the different promos and benefits of different cards. We just wanted to make it easier for people. Every person is different in their spending and how they use their credit cards. We realized that you could use data to make better decisions and to make it faster and easier for people and a lot more accurate. That’s what we started to build with GigaPoints.
How does GigaPoints use data? How does the platform actually work?
We securely connect to your existing accounts and pull that information and use that to analyze your spending. All these different cards have different bonuses for different things. A lot of cards will give bonus points for dining or travel or gas or groceries. Given the distribution of your spend and then what it is that you’re looking for, whether it’s points or cash back, there are completely different cards that will work for you. If you spend a lot of money, then maybe an annual fee is actually really worthwhile because you get more benefits. If you don’t have as much spend, maybe you want a simpler, no-annual-fee card. But essentially our algorithm will take all those pieces in, it’ll weigh all those different things, and it’ll essentially calculate how much you might save. What we’re finding is that people that go through the algorithm, we’re finding over a thousand dollars of savings for them if they were to switch cards.
How would you say you’re different from other platforms that exist?
Right now, we’re one of the only ones that actually look at you and then analyze your spending. There are lots of sites out there that essentially put the burden on the consumer to figure out what the right card is for you. There will be dozens and dozens of articles on some of these sites that are very popular, but ultimately you have to read them, you have to analyze it yourself. Even then, it’s hard to know. There are things that humans can’t really do, those calculations that a computer can’t quite do easily.
How do you keep data safe?
It’s one of our most serious engineering efforts. Everything is encrypted as soon as it comes in. We actually never have access to your passwords or your login information. All of that’s managed through a third-party company called Plaid, which is used by Venmo and American Express, and roughly a third of Americans have used Plaid and never really realized it, but they’re the ones who handle the interface with the bank. So we never see your username, we never see your password. We’re not able to change anything. Once we have a copy of your data, everything’s anonymized and encrypted. We’re extremely careful with how it’s stored and protected.
What do you think is better: points or cash back?
Cash back is the simplest and the easiest. There’s 2% cash back cards out there that give you 2% back on everything. To me, that’s sort of a floor of what you should be earning. The money just shows up, it’s easy. What I will say is if you’re willing to put a little effort in, you can get more total value from points. Especially some of the more advanced points cards will give you three or even four points per dollar and then those points can be worth more than a penny, right? So sometimes some of your spend will get, when you calculate sort of a return, it’s anywhere from 3% to 5%, compared to 2% cash back.
What advice do you have for entrepreneurs out there who are about to start a company when it comes to shaping company culture?
Culture, I think, is one of the most critical things. To me, it’s about being consistent and that the things that you do exist throughout the company. If you see successful companies, they’re usually a reflection of their founder and the founder’s strengths, but then the culture is kind of reinforcing.
What leadership qualities of yours do you think have attributed to GigaPoints being so successful?
I think what we try to do is hire good people and let them do good work. We have a relatively experienced team and we were remote even before the pandemic hit. I think that gives us some flexibility to try to be clear about our goals and what it is we’re trying to accomplish and then let people do their best work. Try not to waste people’s time in meetings that they don’t need to be in all the time.