Key Takeaways:

Growth for both credit and debit for May was steady and positive, influenced by the uncertainty around import tariffs. Debit purchases were up 5.2%, with the Goods sector contributing just over one-third of the growth. Credit purchases were up 1.3%, with the Goods sector contributing just over half of the increase. For May, debit transactions were up 3.2% and credit transactions were up 1.8%.
In this month’s analysis of loyalty and rewards programs, we see the following trends:
- The two oldest generational segments (Boomers+/Gen X) historically represented 67.3% and 88.5% of rewards accounts and earnings, respectively, while the remaining generations collectively accounted for only 11.5% of rewards earnings, despite accounting for 32.7% of account mix.
- Boomers+ and Gen X demonstrated lower rewards redemption/earned ratio at 14.6% and 15.9%, respectively, compared to younger cohorts ranging from 26.5% to 34.9%.
- Cash consistently represents the majority of Rewards redemptions, with the exception of the holiday season, when a downturn in cashback was mirrored by an uptick in gift card redemptions.
The 12-month CPI through May increased by 2.4%, up 0.1% from April. The shelter index continues to contribute significantly to the monthly increase. Energy decreased by 1.0% due to drops in gasoline. Core inflation, which excludes food and energy, is up 0.1% at 2.8% for May.

What Credit Unions Should Do Now:

Credit unions should strengthen their portfolios by offering competitive rewards products that drive member engagement and enhance loyalty. Positioning rewards programs as valuable financial tools will allow credit unions to deepen member relationships, increase transaction volumes and boost fee income.
Explore more lower-point redemption options or gamified rewards offerings to drive engagement with more frequent rewards redeemers – often associated with younger generations.
Offer a variety of compelling travel and “trophy purchase” redemption options for higher-income, typically older members who tend to accrue a higher percentage of earned rewards.
Encourage active participation in your loyalty program. Launch customized, targeted, multichannel marketing campaigns to boost engagement with cardholders, including reminders for soon-to-expire points.