Debit card spending is quietly having a breakout year in 2025, growing faster than credit and emphasizing the need for debit card rewards to capture spend. For banks, credit unions, and payments leaders, this is more than a blip in consumer preference. It’s a signal to rethink how loyalty programs can anchor debit as the go-to payment method.
The Trend: Debit Card Usage Outpaces Credit in 2025
Q: Which payment method is growing faster in 2025—debit or credit?
A: According to the Velera Payments Index1, debit purchases grew 5.2% year over year in May 2025, compared to just 1.3% for credit. Primax’s Q2 20252 data shows a similar trend, with debit up 5% versus 1.6% for credit.
Non-discretionary categories—groceries, utilities, and fuel—are leading the way for debit growth, aligning closely with where consumers already spend most frequently.
“We’re seeing this growth in debit happen against a backdrop of economic caution, where consumers are being more intentional with every dollar they spend,” says Rachael Peterson, VP of Client Success and Development at ampliFI. “Debit’s ‘spend-what-you-have’ appeal resonates strongly right now, particularly with members who are cautious about using credit.”
Why Do Debit Card Rewards Matter for Banks and Credit Unions?
Debit cards are a daily touchpoint between consumers and their financial institutions. When paired with the right loyalty strategy, every debit transaction becomes an opportunity to strengthen engagement, build trust, and increase portfolio value. By rewarding spending in the categories members already prioritize, financial institutions can make everyday purchases more rewarding and keep their brand at the center of members’ financial lives.
The Loyalty Opportunity for Debit Card Rewards in 2025
Reward Everyday Spend Categories With Debit Card Rewards
High-frequency, non-discretionary spend is driving debit growth—groceries, utilities, and fuel are consistent leaders in year-over-year growth for debit1,2. Building rewards into these categories means you’re meeting members where they already are.
Example – Set-and-Forget Bonus Categories: A “2X Points on Groceries & Wholesale” promotion that runs for a full quarter and requires no re-enrollment. By eliminating extra steps, you keep members engaged without adding friction, and you reinforce that their everyday spending is rewarded.
Activate Real-Time Rewards
How do point-of-sale rewards drive debit usage? By meeting cardholders in the moment. Real-time redemptions, such as Checkout With Points for everyday purchases or Fuel With Points for instant pump savings, make rewards visible and valuable in the moment and activate the loyalty flywheel.
Reinforcing the behavior loop:
- Earn points where members already spend.
- Redeem instantly at checkout or the pump to create a “reward now” experience.
- Repeat as members recognize the value of using the same card again.
Match Credit Card Perks With Diverse Earn and Redeem Options
Q: Why is flexibility important in debit card rewards?
A: Cardholders want choices when it comes to earning and redeeming points. A program built solely on cashback risks falling short of credit competition. The most competitive programs offer a mix of earn and redemption options that appeal to different member preferences and spending habits.
Pair cash-like rewards—such as Pay With Points, card-linked offers, or digital gift cards—with high-frequency earn categories like groceries, fuel, and utilities. This variety ensures members can earn rewards in ways that feel natural and redeem them in ways that feel personal.
Use Personalized Segmentation Strategies
Velera’s data shows that younger consumers redeem rewards at nearly twice the rate of older cohorts—a “burn” behavior driven by frequent, attainable redemptions1. These segments respond well to early activation campaigns, such as “Spend $1,000 in your first 90 days and earn 3,000 bonus points,” which help cement debit usage during the crucial first 90 days.
PYMNTS Intelligence3 further supports a debit-first focus. At the start of 2025, their research revealed that “cash on hand” remains a guiding factor in everyday purchases. Debit is the payment method of choice for 44% of grocery transactions compared with 26% for credit, and in retail, the split is 39% debit versus 30% credit. Convenience is another major driver, making debit a natural fit for high-frequency, non-discretionary categories—exactly the types of purchases where loyalty programs can have the most impact.
Older members, who tend to “yearn” and save points for larger rewards, respond better to periodic high-value offers or expiration reminders. By segmenting strategies—frequent, attainable offers for “burn” segments and targeted, high-value incentives for “yearn” segments—financial institutions can engage both groups and capture more debit spend.
Debit Card Rewards: From Passive Payment to Preferred Habit
The debit card is no longer the quiet workhorse of a wallet—it’s a primary payment method for millions. By pairing it with meaningful, flexible rewards, banks and credit unions can keep those transactions in-house, build deeper engagement, and turn debit from a passive payment option into a preferred habit.
In 2025’s shifting payments landscape, loyalty is the bridge between spend patterns and sustained portfolio growth.
Ready to grow debit use? Let’s talk.
Sources:
1Velera Payment Index – June 2025.
2Primax Payments Pulse: Summer 2025 Spending Report
3PYMNTS: Debit Rewards Surge as Consumers Shift Spending Preferences