Credit Unions Must Upgrade Rewards to Win Member Spending

Credit unions have long competed on low fees, local service and member trust, but being a customer’s primary financial institution does not guarantee top-of-wallet status. Card usage matters because it generates interchange revenue, transaction data and opportunities to deepen deposit relationships. PYMNTS Intelligence and Velera say richer, more targeted rewards could help credit unions convert institutional loyalty into everyday spending, particularly in discretionary categories where national-bank cards remain stronger.

The July 2026 study surveyed 14,218 consumers and 3,529 small and mid-sized businesses. It found that 61% of consumers considered a credit union their primary financial institution, while only 48% of credit union cardholders used that card most often, versus 69% for national-bank cardholders. Rewards were cited by 44% of credit union cardholders as a leading reason for choosing a card, pointing to travel, dining and retail as key areas for upgraded offers.