- Key insights: Saginaw, Michigan-based United Financial Credit Union has partnered with Prizeout to launch its own rewards credit card to capture a greater volume of member spending and own more of the customer relationship.
- What's at stake: Credit cards are one of the most frequent touch points that customers have with their bank or credit union. Financial institutions that don't offer credit cards lose out on cross-sell opportunities, interchange fees and potential interest revenue if a customer revolves a balance.
- Forward look: Nearly a dozen other credit unions have launched or are preparing to launch their own rewards credit card, Prizeout CEO David Metz told American Banker.
As some of the country's largest credit card issuers
Saginaw, Michigan-based United Financial Credit Union is one of the latest to launch its own rewards credit card through a deal with credit union service organization Prizeout. United Financial previously offered a rewards credit card that was managed by a third-party vendor.
"We have not had a credit card program for a couple years now," Sarah Vasey, chief operations officer at United Financial Credit Union, told American Banker. "We used to be with a third party, but being with a third party takes us out of the picture a little bit. We lost control on the service side, partially."
The arrangement made it more difficult for United Financial's members — which number around 23,000 — to self-serve their accounts because they had to navigate out of the credit union's app to the third-party provider's app. Vasey declined to name the fintech that previously managed its credit card.
"That's not a member experience that we are looking to accomplish," Vasey said. "We want to have that relationship building happening all the time, and pushing them somewhere else doesn't allow for that."
Credit unions are in a challenging spot when it comes to credit card rewards, according to Eric Grover, principal at Intrepid Ventures.
"It's vital that credit unions offer compelling credit card rewards, if only to defend against credit-issuing colossi poaching their members or their share of wallet," Grover told American Banker, noting that credit cards are one of the most frequent touch points that customers have with their bank or credit union. Financial institutions that don't offer credit cards lose out on cross-sell opportunities, interchange fees and potential interest revenue if a customer revolves a balance.
"Most credit unions lack the scale to compete head-on. Their unit costs are higher, and their marketing resources and savvy are outmatched," Grover said. "But credit unions can't afford not to play. They must integrate their credit cards with the core banking relationship, weaving in relevant local benefits on top of conventional cash-back features."
Financial institutions also lose out on the data that those transactions provide, he said.
Prizeout is hoping its rewards program can use that data to provide better-targeted rewards to credit unions' members, David Metz, CEO of Prizeout, told American Banker.
In a third-party model, "credit unions don't really control their data as it relates to the credit card processes," Metz said. "So because of that, the rewards themselves have become stale: 1% groceries, 2% fuel; it's the same thing, regardless."
Rewards can be more targeted if the credit union takes control, Metz said. For example, a credit union with a veteran member base could offer additional rewards when members shop veteran-owned businesses or other small businesses in the credit union's small-business banking portfolio.
"That allows them to differentiate to their core," Metz said.
Prizeout is also working on building out merchant-funded rewards, similar to merchant-funded subvented financing offers that buy now/pay later lender
"Let's say DoorDash wants to own [the category of] grocery. For a whole quarter, a merchant can own that category. They're funding the reward," Metz said.
Merchant partnerships are a budding trend in credit card rewards, according to Aaron McPherson, principal at AFM Consulting.
"This is something that credit unions, with their local orientation, could potentially bring to more merchants," McPherson told American Banker.
Credit unions that don't offer credit cards with rewards are also disadvantaged because cardholders have come to expect rewards, he said. Over 80% of consumers surveyed by the American Bankers Association said that they had a rewards-based credit card.
Those cardholders value the rewards offered, too. In fact, 90% of consumers surveyed in October 2025 by the American Bankers Association said that they valued their rewards program on their credit cards. Only 8% said they didn't hold "much" value in their credit card rewards program, and 1% said they didn't value the rewards program at all.
