The news: Credit unions and community banks should lean on local rewards and exclusive experiences tied to their credit card program to boost their brand image.

Zooming in: Sixty-one percent of credit union members count their credit union as their primary banking institution, but that hasn’t translated into credit card loyalty. 

Credit unions’ credit cards tend to offer weaker rewards than bigger banks. Credit unions instead need to flip issues of scale into an opportunity by focusing on local rewards, per the Financial Brand. By focusing on the specific region that they serve, credit unions can strengthen ties with local merchants and connect rewards to SMBs frequented by their members.

Why this matters: Cards are the highest-frequency touchpoint an FI has with members. And community-based credit card programs reward members for supporting neighborhood businesses. 

This community outreach gets metabolized into a better brand image: Credit union members already rate their credit unions 17 points higher for caring about their local communities than banking customers rate their banks, per a poll from America’s Credit Unions.

Implications for credit unions: Wrapping rewards programs around local partners and merchants can keep credit unions’ card programs competitive and relevant to cardholders who place a deeper emphasis on supporting local businesses. 

This could look like leaning into local experiential rewards, like early ticket access to buzzy community events and partnerships with local restaurants and hospitality leaders. This could deepen the sense of belonging members get from being credit union members.

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