Trust Alone Won't Win Credit Union Card Use: Rewards Gap Persists

Credit unions have built the trust. Most consumer members already call their credit union their primary financial institution, and satisfaction scores run well ahead of retail banks. Yet that trust does not automatically translate into everyday card usage. Credit unions convert just 48% of consumer cardholders into top-of-wallet users, compared with 69% for national banks, according to PYMNTS Intelligence research cited in a new Tracker produced in collaboration with Velera.

The gap is not uniform across spending categories. Credit union cards lead in the automated, recurring payments that members set once and forget. Twenty-three percent of credit union cardholders use their card for rent and mortgage payments, versus 16% of national bank cardholders. Utility bills, internet and mobile service, and basic healthcare also tilt in the credit union's favor. Those categories share a common quality: the member picks the card once and the charges run on autopilot.

Discretionary spending tells a different story. Travel spending marks the widest gap: credit union cardholders are 45% less likely than national bank cardholders to put their credit union card first for travel purchases. Electronics trails closely at 35% less likely. Retail and restaurant purchases also favor national bank cards, though by narrower margins. These purchases require an active decision at the point of sale, and that is where rewards carry the most weight.

Rewards are the top factor in choosing which card to use, cited by 44% of credit union cardholders overall. Among members who already put their credit union card at the top of their wallet, that figure drops to 32%, suggesting that rewards are a bigger motivator for the members a credit union has not yet converted. Existing top-of-wallet members instead prioritize contactless payments, spending visibility across accounts and customer service.

The business case for richer rewards programs may already exist. Credit unions with less than $10 billion in assets remain exempt from the interchange fee limits under the Durbin Amendment, allowing them to retain additional transaction revenue that can help fund more competitive card programs. Rather than sacrificing margins, those institutions have flexibility to invest in rewards and features that encourage members to shift more everyday spending onto their credit union cards.

Mastercard findings cited in the Tracker indicate that active card usage generates richer transaction data, which issuers can use to personalize offers and fine-tune rewards over time. Engagement does not just signal a strong relationship; it deepens it.

Credit unions have already built the member trust and satisfaction that many competitors seek. Converting that trust into everyday card usage may require a different value proposition. That often means rewards.

The broader member experience remains an important differentiator, yet experience alone may not be enough to influence payment behavior. JD Power's 2026 U.S. Credit Union Satisfaction Study put credit union satisfaction at 725 on a 1,000-point scale, 68 points ahead of retail banks, even as that score edged down four points from a year earlier. The study attributed the continued edge to low fees, personalized service and competitive interest rates. At the same time, member behavior is growing more complex. More consumers are opening checking and savings accounts with multiple institutions and gradually shifting portions of their activity elsewhere.

For credit unions, the clearest path to closing the top-of-wallet gap is to pair hard-won trust with rewards that compete where it matters most: the discretionary purchase.