Targeted Rewards Could Close Credit Unions’ 21-Point Wallet Gap

Credit unions have long focused on building strong customer relationships, but recent research shows that there's a significant difference in how credit unions and national banks compete for customers. According to the latest PYMNTS intelligence in the 2026 Credit Union Tracker ® Series, 61% of credit union members consider their credit union their primary financial institution, and 87% of consumers with a credit union as their primary financial institution report being very or extremely satisfied with it.

However, credit unions convert only 48% of their cardholders into top-of-wallet users, compared to 69% for national banks, creating a 21-point gap.

This gap highlights a fundamental difference in customer banking: owning the financial relationship isn't the same as owning the transaction. Credit unions excel when consumers don't have to actively choose a card, with 23% using their cards for rent or mortgage payments, 16% for utilities, internet, and mobile services, and 16% for basic healthcare.

However, credit unions trail behind national banks when consumers have to make a choice, with travel purchases being used by only 11% of credit union cardholders compared to 20% of national bank cardholders.

Interestingly, 44% of consumers cite rewards as a top factor when deciding which card they use most. However, only 32% of consumers who already have their credit union card in their wallet say the same. The data suggests that rewards may matter most in categories where credit unions struggle, such as travel, dining, and retail. For credit unions, the key to closing the wallet gap may not be increasing rewards uniformly across their entire portfolio, but rather deploying rewards more selectively in key battleground categories.

By offering personalized cash back, merchant offers, and category-specific incentives, credit unions could potentially move more spending from national banks to their institutions.