November 4, 2026

The Wallet Has One Slot. Which of Your Cards Is in It?

Chuck Andrews, Managing Director, Bassett Capital Group

Velera released its 2026 Eye on Payments study with a finding that deserves attention from credit union card managers. For the first time, debit has overtaken credit as the most commonly loaded card type in digital wallets. Weekly wallet use among credit union members has nearly quadrupled, from 11% in 2022 to 42% in 2026.

The Federal Reserve’s 2026 Diary of Consumer Payment Choice reports that 38% of consumers preferred credit for in-person payments in 2025, up from 24% in 2016 and nearly level with debit at 40%. From 2021 to 2024, credit added more transactions than debit, the first measured three-year period in which this occurred since the Fed’s payments study began in 2000.

Credit is where the growth is. Debit is where the habit is, and debit is the credit union’s home product, tied to the member’s primary account. For credit unions the Velera finding is good news with a condition attached: the wallet slot is decided once, at provisioning, and then runs on autopilot. The debit card has to be the one that gets loaded, and the credit card has to earn its way in.

What the issuer data show

The PULSE 2026 Debit Issuer Study reports that debit penetration fell 2.2% in 2025 while active rates rose 2.0%. Fewer cards per account, more use of the ones that stayed. The question for any one credit union is which card survived the cut.

Credit card balances at federally insured credit unions reached $87.2 billion in June 2026, up 2.5% in a year, against membership growth of about 1.6%. The book is growing a little faster than the member base, in a stretch when credit has been the fastest-growing card type in the country. Whether it is gaining share of members’ spending is a question for activity data, not balances.

What a lost slot costs

PULSE puts annual interchange revenue per active debit card at $162 for issuers exempt from the Regulation II cap, against $91 for covered issuers. For exempt credit unions, the higher benchmark is the relevant comparison. When a debit card becomes the second choice, that spending, and the interchange with it, moves to another issuer, usually one of the largest card issuers. The interchange is the smaller loss. The larger one is the daily contact with the member, which now happens on someone else’s card.

Credit card economics explain why the largest issuers fight so hard for that slot. A 2022 Federal Reserve study of 13 large banks, covering 2014 through 2021, attributed about 80% of credit card profitability to the lending function and found the transaction contribution slightly negative on average. The largest issuers make little or nothing on the transaction itself and earn their return on the balance, which is why they compete to be the card a member reaches for first. The same arithmetic applies to a credit union card. When it drops to second position, the balance follows the spending, and purchase activity shows it long before the call report does.

Two cards, two yardsticks

Start with the data you already have and compare your results with credit unions your size.

For credit, track member penetration, credit-line utilization, and average balance per account over time. Use member and processor records to measure the share of members with your card, keeping all open accounts separate from accounts with balances.

Call reports help with peer comparisons, but their credit-card loan count includes only loans with outstanding balances. Loan count against membership is a proxy for penetration, not the real thing, and balance per reported loan runs higher than the average across all open cards.

For debit, compare your processor’s activity data with the PULSE benchmarks. Best-in-class thresholds are active rates above 74% and more than 33 POS transactions per active card each month, against averages of 67% and 31, respectively. An active rate below 59% is in the study’s bottom quartile.

Review both portfolios separately. Strength in one should not conceal a problem in the other. One of them may be winning the wallet while the other is not.

Steady averages, split outcomes

PULSE also shows why a national average is not enough. Top-quartile issuers generated nearly 40% more transactions per active card than bottom-quartile issuers, and only 53% of issuers grew transactions per active card at all. A steady average can conceal quite different results across institutions.

For credit cards, compare growth in members with your card against total membership growth, using your own member-level records. If cardholder growth trails membership growth, your member penetration is declining.

These differences are a reason to examine the experience around the card: instant digital issuance, wallet provisioning at account opening, alerts and controls. I would start by checking whether members use those features in the first weeks of the relationship. Improving that experience takes sustained investment.

Three moves before year-end planning closes

Score both cards: use call reports for credit peer benchmarks and internal member and transaction data for adoption and use. Compare debit activity with the PULSE quartiles.
Choose a specific performance gap and name an owner. One person, one card, one quarter.
Review provisioning for members who opened an account this year: among those issued each card, how many added it to a wallet within 30 days? Measure credit and debit separately, then check whether those cards are being used. If you cannot answer those questions, start by closing the data gap.

The “slot” worth competing for is a place in the member’s routine. The first step is knowing how your cards are being used today.

Chuck Andrews is Managing Director at Bassett Capital Group, where he advises credit unions on payments and card portfolio strategy. A recovering banker, he spent more than 25 years at Bank of America in global payments partnerships and card strategy. His white paper series on payments and card portfolio performance is published with The Credit Union Connection.