Credit card issuers may think their biggest retention threat is another bank persuading a customer to open a new account.
But the replacement card may already be sitting in the customer’s wallet.
PYMNTS Intelligence’s “The Switching Trigger: How Issuers Can Stop Their Credit Cards From Losing Top-of-Wallet Status” report, in collaboration with Elan, surveyed 2,460 U.S. consumers with at least one general-purpose credit card in June, including 884 who had changed their primary card during the previous 24 months. Thirty-six percent of U.S. cardholders, an estimated 78 million people, switched during that period.
The numbers show that retaining top-of-wallet status involves more than preventing account closures. It means recognizing when spending is moving somewhere else, often before the customer has given the issuer an obvious reason to intervene.
Here are five things to know.
1. The Biggest Competitor May Already Be in the Wallet
Among consumers who switched primary cards, 58% elevated a card they already had, compared with 42% who obtained a new card. That translates to roughly 45 million switchers moving an existing card into the primary position versus 33 million choosing a newly obtained one.
An issuer doesn’t necessarily lose top-of-wallet status when another issuer wins an application. It can happen when a cardholder redirects spending among accounts already open.
2. Issuers Don’t Have Much Time to React
Switchers generally make decisions quickly. Seventeen percent searched for less than a week, 29% for one to two weeks and 25% for three to four weeks. In total, 71% settled on their new primary card within a month.
Thirty-eight percent seriously considered only the card they ultimately selected, while 40% compared it with just one alternative. The data show that 78% considered no more than two cards.
3. Nearly Half of Switchers Leave Without a Retention Conversation
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Forty-six percent of switchers had no contact with their previous issuer before moving another card to the top of their wallet. Another 37% contacted the issuer themselves but weren’t retained: 20% said the counteroffer wasn’t enough and 17% received no offer or resolution.
Only 17% said the issuer initiated contact, and those consumers said the outreach didn’t include a meaningful offer. The opportunity isn’t limited to designing better retention incentives. Issuers first have to recognize that the relationship is changing.
4. Retention Offers Don’t Match What Switchers Say They Want
Among 335 switchers whose issuer made a retention attempt, the most common responses were annual fee relief at 32%, statement credits or cash back at 31%, promises to improve the digital experience at 31%, and bonus points or miles at 31%.
Asked what could have kept their previous card on top, however, all switchers put a meaningful loyalty or retention bonus first at 25%, followed by a higher credit limit at 24% and a matched or improved rewards rate at 23%. Only 13% said nothing could have kept them using the old card as their primary card.
Issuers must work to discover whether the offer addresses what the customer values.
5. Once a Cardholder Switches, Another Switch Becomes More Likely
Fourteen percent of all cardholders, equating to roughly 30 million consumers, say they’re extremely or very likely to switch their primary card during the next 12 months.
Past behavior identifies a much higher-risk group. Among consumers who switched during the previous 24 months, 29% say they’re likely to do so again, nearly six times the 5% rate among consumers who hadn’t switched. Gen Z also stands out: 26% say they’re extremely or very likely to switch in the coming year, compared with 3% of baby boomers and seniors.
Top-of-wallet status therefore isn’t necessarily regained once and secured. For issuers, the data suggest that the customers who have already demonstrated a willingness to move their spending may be the ones requiring the closest attention.
At PYMNTS Intelligence, we work with businesses to uncover insights that fuel intelligent, data-driven discussions on changing customer expectations, a more connected economy and the strategic shifts necessary to achieve outcomes. With rigorous research methodologies and unwavering commitment to objective quality, we offer trusted data to grow your business. As our partner, you’ll have access to our diverse team of PhDs, researchers, data analysts, number crunchers, subject matter veterans and editorial experts.
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