The Top-of-Wallet Challenge: Why Trust Alone Is Not Enough to Drive Card Usage

Credit unions (CUs) have succeeded in building trusted relationships with their members. Most consumer members already view their CU as their primary financial institution (FI), and satisfaction levels remain exceptionally high. Yet those advantages do not always translate into everyday card usage. This Tracker examines why credit unions continue to trail national banks in top-of-wallet conversion, where they already win member spending, and how rewards and card features could help close the gap.

• CUs Have Won Member Trust but Not Always Top-of-Wallet Status
• CU Cards Win Essential Spending but Lose Discretionary Purchases
• Rewards May Be the Missing Ingredient in the Top-of-Wallet Formula
• Turning Member Trust Into Top-of-Wallet Card Usage

CUs Have Won Member Trust but Not Always Top-of-Wallet Status

High member trust and satisfaction give credit unions a powerful competitive foundation, but these alone are not enough to secure top-of-wallet status. Greater card engagement can deepen relationships and drive stronger long-term growth.

Strong member relationships create a competitive foundation.

These primary relationships are reinforced by exceptionally high satisfaction. Nearly nine in 10 consumers (87%) whose primary FI is a credit union report being very or extremely satisfied with their experience. Members who place a CU card at the top of their wallet report higher satisfaction than CU cardholders whose top-of-wallet card comes from another institution, 84% versus 80%, suggesting that deeper payment relationships reinforce overall institutional loyalty.

Industry research paints a similar picture. JD Power’s 2026 U.S. Credit Union Satisfaction Study puts CU 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 attributes CUs’ 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 FIs and gradually shifting portions of their activity elsewhere. Even while satisfaction remains high, that fragmentation means CUs must compete harder for everyday engagement.

That challenge becomes even more apparent when examining card usage. Although most members consider the CU their primary institution, fewer reach for their credit union card for daily purchases. CUs convert just 48% of consumer cardholders into top-of-wallet users, compared to 69% for national banks. The result is a meaningful gap between relationship ownership and transaction ownership.

Top-of-wallet members deliver stronger engagement outcomes.

Members who consistently use a credit union card show stronger engagement across the full relationship, tracking with faster-rising deposit growth and higher overall satisfaction. Among members who put a CU card first, the share reporting increased deposits has risen fastest: up 30% for top-of-wallet consumer members and 28% for top-of-wallet SMB members between late 2024 and early 2026, outpacing every other member segment. That pattern suggests that winning the payment decision goes beyond simply increasing card volume to strengthen the member relationship itself.

Mastercard findings help indicate why: Active card usage generates richer transaction data that issuers can use to personalize offers, fine-tune rewards and optimize portfolios over time. The more a member uses the card, the more an issuer can tailor the experience to them. In this way, engagement doesn’t just signal a strong relationship; it deepens it.

CU Cards Win Essential Spending but Lose Discretionary Purchases

Credit union cards already lead many recurring, automated payments but struggle to capture discretionary spending. Rewards often determine which card CU members reach for on discretionary purchases.

CU cards already own many recurring payment relationships.

Much of this strength sits in bills that recur on a fixed schedule. For rent, utilities and phone or internet service, a member sets the CU card once and the charges continue on their own, requiring no decision at the point of sale. According to Finopotamus, that “set it and forget it” quality works in a credit union’s favor. Automated card payments make revenue more predictable, lighten the operational load of pursuing missed payments and keep members in frequent, low-effort contact with the institution. That ongoing contact, in turn, creates openings for more personalized outreach and stronger relationships over time.

Rewards-driven purchases remain a competitive weak spot.

The pattern shifts when purchases require active card selection. In discretionary categories such as travel, electronics, retail, subscriptions and restaurants, credit union cards consistently trail national bank competitors. Travel represents the widest gap: CU cardholders are 45% less likely than national bank cardholders to put their CU card first for travel purchases, at 11% versus 20%. It is nearly as wide for electronics, at 35% less likely (11% versus 17%), and narrows across retail, at 20% less likely (16% versus 20%), and restaurants, at 11% less likely (42% versus 47%). Unlike recurring bills, these purchases require consumers to decide in the moment, weighing which card delivers the greatest value at the point of sale.

Rewards programs frequently determine those decisions, and it is here that CU cards fall behind. Broader consumer research points the same way. Motley Fool reports that nearly two-thirds (64%) of Americans consider card features, including rewards, interest rates and other benefits, more important than trust in the issuer when choosing a credit card. Confidence in an institution still matters, but consumers judge a card by the tangible value it returns on everyday spending.

The contrast defines the opportunity. CUs already win the habitual, automated payments that members make without thinking. The larger prize is discretionary spending, the case-by-case purchases where rewards carry the most weight and where CU cards trail by the widest margins.

Rewards May Be the Missing Ingredient in the Top-of-Wallet Formula

Rewards are the top factor in choosing a card, and that’s where CU cards fall short. Competing on rewards is a credit union’s clearest path to closing the top-of-wallet gap.

Closing the top-of-wallet gap may come down to rewards.

Credit unions have already earned member trust, but 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, but experience alone may not be enough to influence payment behavior. According to JD Power’s 2026 U.S. Credit Union Satisfaction Study, CUs continue to outperform banks in overall member satisfaction, yet maintaining that advantage will require delivering consistent value across both digital and in-person interactions. The study also found that CUs often communicate most frequently about products and promotional offers, while members respond more positively to practical financial guidance and advice that helps them save money. Combining stronger card benefits with more relevant engagement could therefore strengthen loyalty and drive top-of-wallet card usage.

CUs have an opportunity to compete more aggressively.

For many institutions, 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 established under the Durbin Amendment, allowing them to retain additional transaction revenue that can help fund more competitive card programs. Rather than sacrificing margins, these institutions may have greater flexibility to invest in rewards and features that encourage members to shift more everyday spending onto their CU cards.

Where to direct that investment depends on the segment. SMB members who have not yet converted to top-of-wallet status lean toward practical tools like budgeting and expense management, while younger members look for rewards that connect to their financial goals and feel tailored to them, not one-size-fits-all cash back.

The case for prioritizing rewards is strong. PYMNTS Intelligence reports that rewards and discounts rank as a top card-choice factor, cited by 48% of cardholders. Mastercard finds a similar pull, with 41% of consumers saying they would move a secondary card to the top of their wallet for better rewards and benefits. Motley Fool reports that younger generations, particularly Gen Z, place even greater emphasis on rewards than older consumers when evaluating credit cards. Together, these findings point to the same conclusion: Rewards are what decide which card gets used.

Turning Member Trust Into Top-of-Wallet Card Usage

Credit unions have already built the member trust and satisfaction that many competitors seek, but stronger card engagement requires more than that. As consumers weigh rewards and everyday value when choosing which card to use, institutions have an opportunity to strengthen top-of-wallet performance by aligning card programs with the behaviors that drive usage.

PYMNTS Intelligence offers the following actionable roadmap for CUs seeking to strengthen top-of-wallet performance:

• Compete on rewards where the decision is active. Focus rewards investments on discretionary categories such as travel, dining and retail, where consumers actively choose which card to use.
• Build on the payments CUs already win. Use existing bill-pay activity as a foundation for personalized offers, cross-selling opportunities and broader member engagement.
• Match the card to the member. Pair competitive rewards with features such as spending insights, budgeting tools, contactless payments and seamless digital experiences that encourage long-term loyalty.
• Put member data to work. Leverage transaction insights to deliver more relevant communications and targeted offers that reinforce everyday card usage.

By pairing hard-won trust with compelling rewards and purpose-built card experiences, credit unions can turn everyday spending into deeper, longer-lasting member relationships.

Trust is the foundation of the credit union movement, but in today’s payments landscape, trust alone doesn’t determine which card consumers use every day. Being a member’s primary financial institution doesn’t automatically make a credit union’s card the first one pulled from a wallet. As consumers increasingly choose payment cards based on rewards, convenience and value, credit unions that align their card experience with those expectations have an opportunity to capture a greater share of everyday spending, strengthen member relationships and drive long-term growth.”