BOSTON– Credit union members say rewards influence their spending and banking choices, but their use of rewards programs trails that of national bank customers, according to research from PYMNTS Intelligence and Velera.
The report, “The Rewards Gap: Turning Member Interest into Growth,” part of the November 2026 Credit Union Tracker series, found that 14% of credit union members used a loyalty or rewards program at their primary financial institution during the previous year, compared with 25% of national bank customers.
The findings point to opportunities for credit unions to increase card use and attract primary banking relationships, while highlighting a disconnect between executives’ views of their programs and members’ experiences.
Rewards Influence Card Use
Among consumers with multiple cards, 40% cited better incentives, including cashback, as a factor in deciding which card to use. That exceeded the shares citing lower interest rates or fees, at 30%, and higher credit limits, at 22%.
Among credit union members, 44% said rewards affected their card choice. The report also found that 60% of credit union members who use multiple cards do so to maximize rewards or perks.
Rewards could also influence where consumers keep their primary accounts. Among consumers whose primary financial institution was not a credit union, 32% said better rewards or cashback would make them more likely to choose one. Only lower rates or fees ranked higher, at 34%. Among small and midsize businesses outside the credit union system, 30% identified better rewards as a reason to consider a credit union.
Among credit union members who maintained their primary accounts elsewhere, 39% said better rewards could persuade them to make a credit union their main institution. Better rewards also could influence 37% of Generation Z consumers and 36% of millennials who primarily banked elsewhere.
Executives and Members Differ
The research found that 45% of credit union executives believed their institution offered better rewards than its biggest competitor. Just 14% of members identified rewards as an advantage offered by their credit union, a 31-percentage-point difference.
Rewards also ranked high among priorities for future investment. Among consumers who wanted their financial institutions to innovate, 27% named loyalty or rewards programs as the feature they most wanted investment in over the next three years, ahead of account fraud protection and mobile banking. Among small and midsize businesses, 24% placed rewards or loyalty programs first.
Expansion Plans and Partnerships
Currently, 47% of credit unions offer loyalty or rewards programs, while another 31% plan to introduce them within three years, according to the report.
Among credit unions with less than $500 million in assets, 31% offer rewards programs and another 43% intend to introduce them within three years.
The share of credit union executives identifying member engagement, including loyalty programs and offers, as a leading innovation focus for the next three years rose from 36% in late 2024 to 53% by May 2026.
Among executives open to outside support, 52% expected to work with external partners on loyalty, rewards or other member engagement programs. That share reached 58% among credit unions with less than $500 million in assets that were open to external support.
The report said partnerships could help institutions access technology, data capabilities and merchant relationships needed to build competitive programs. It cautioned that expanding availability alone would not ensure members participate.
The Recommendations
PYMNTS Intelligence recommended that credit unions align incentives with members’ spending habits, evaluate rewards as a tool for attracting and deepening relationships, compare executive assessments with member feedback and participation, and assess whether outside providers could help expand capabilities.
