The news: Credit unions have primacy with many of their members. But they’re struggling to turn those relationships into everyday engagement, per PYMNTS Intelligence.

Zooming in: Sixty-one percent of credit union account holders consider their credit union their primary financial institution—higher than digital/fintech competitors (45%), according to PYMNTS Intelligence. But just 48% of credit union cardholders put their credit union card at the top of their wallet, trailing national banks (69%), regional and local banks (60%), and digital banks and fintechs (56%).

Zooming out: Credit unions do capture some important spending: Their cards are 44% more likely than national bank cards to be used for rent or mortgage payments. They also outperform national banks on utilities, groceries, and healthcare, per PYMNTS Intelligence.

But a card stored for a mortgage or utility autopay can capture spend without becoming the card a consumer chooses at checkout.

Why it matters: For credit unions, the risk isn't simply losing members to bigger banks or nimble digital competitors—which they are, according to EMARKETER survey data. It's also owning the primary account while another provider captures more of members’ everyday financial activity.

Frequent card use can create more opportunities for engagement, generate interchange revenue, provide richer signals about how customers spend, and reinforce the issuer's role in consumers' daily financial lives.

That means credit unions' existing primacy is an advantage but not an endpoint. Turning trusted banking relationships into more frequent, active engagement requires giving members reasons to choose their credit union when they decide how to pay—not just when they decide where to bank.

Implications for credit unions: Higher-frequency behaviors—from making payments and moving money to managing finances and seeking guidance—create repeated opportunities to deepen member engagement. When those interactions happen elsewhere, competitors have an opening to build their own relationships on top of the credit union's primary account.

That makes the next challenge activating the relationships credit unions already have, which—along with customer data and touchpoints—give them a head start. Credit unions should use that advantage to drive adoption of higher-frequency products, improve card and digital experiences, and give members tangible reasons (e.g., rewards, personalization, convenience, and financial tools) to engage more often.

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