Wyndham and Galileo Bet Debit Can Rewrite Loyalty

Gen Z and millennials aren’t just shunning credit cards, they’re helping rewrite how loyalty is earned, with debit emerging as the next way for brands to capture wallet share.

For decades, loyalty meant co-branded credit. Airlines, hotel chains and retailers leaned on cards like Delta SkyMiles or Amazon Prime Visa to reward repeat spending. But the PYMNTS Intelligence report, “ Debit Rewards Rewrite Loyalty for a Credit-Wary Generation ,” shows that model is losing its grip. Younger consumers, raised in the shadow of the financial crisis and carrying student debt loads, are turning away from revolving credit. In its place, debit is gaining both cultural relevance and economic viability.

That shift has given rise to new strategies from payments providers. Galileo Financial Technologies, a SoFi-owned platform, recently launched the first U.S. co-branded debit rewards card in partnership with Wyndham Hotels & Resorts. The card offers modest perks — points on hotel stays and gas purchases, plus automatic Wyndham Gold status — but the response was anything but modest: 60% of cardholders set up direct deposit. For an industry long accustomed to measuring success by top-of-wallet status, that level of engagement is striking.

Why Gen Z and Millennials Prefer Debit

Debt aversion is shaping choices. Gen Z and millennials are turning away from revolving credit in large numbers. Many see debit as a safer option, aligning with lifestyles that avoid interest charges and long-term balances.

Economics now favor debit rewards. Regulatory shifts after the Durbin Amendment, along with the rise of smaller sponsor banks, have improved the margins on debit programs. That means brands can offer perks without carrying credit risk or complex compliance burdens.

Debit loyalty drives deeper engagement. Wyndham’s partnership with Galileo showed how debit can anchor consumer relationships. About 60% of new users tied direct deposit to the debit account, evidence of stickiness that brands have long sought.

For brands, debit loyalty programs also unlock different economics. Unlike subsidized credit programs, debit programs are more predictable and can often be funded through existing brand assets like inventory or off-peak availability. “The changing economics, driven by scale, modular architecture and access to multiple sponsor banks, open up new monetization models, making debit rewards strategically valuable,” Galileo CEO Derek White said in a recent interview with PYMNTS.

The implications are wide-ranging. Retailers and travel companies accustomed to building loyalty around credit card partnerships may soon see debit-based programs as a way to broaden access to consumers they’ve struggled to reach. Meanwhile, FinTechs like Galileo are betting that debit will serve not just as a payment method but as the backbone of digital loyalty ecosystems that could link brands as diverse as airlines and coffee shops.

What was once a “nice-to-have” in the loyalty playbook is fast becoming a “must-consider.” Gen Z and millennials don’t just want rewards, they expect them. But they want them on their own terms, without taking on debt. For brands chasing wallet share, that means debit is no longer an afterthought. It’s the next battleground for loyalty.