How Card Apps Are Changing the Competition for Top-of-Wallet
By Nicole Volpe, Contributor at The Financial Brand
Simple Subscribe
Subscribe Now!
Over the past two decades, how consumers make everyday payments has progressively been transformed as new platforms and competitors have multiplied. In the process, what it takes for a credit card to earn top-of-wallet status has been reinvented too.
For financial institutions competing in card issuance, the shift can make for an unforgiving market. Their brands are increasingly obscured by hyper-convenient platforms that sit between them and their accountholders. At the same time, they face competitors with greater scale, stronger technology, deeper marketing budgets, and more balance-sheet capacity. In this context, the erosion of a reliable business line, one that generates both fee and spread income, can seem almost inevitable.
But that framing no longer tells the whole story. Where top-of-wallet status was once won largely at acquisition — shaped by sign-up incentives, fees, rewards terms, and product features — consumer research now shows that it can be deepened over time, particularly through deployment of issuer-provider apps.
A just-released report by Elan Credit Card with PYMNTS Intelligence — Winning Top-of-Wallet: How Credit Card Apps Shape Choice — explores the topic in detail. Drawing on a 2026 survey of 3,198 U.S. cardholders, the report reveals that seven out of ten consumers say they use their primary card’s app at least occasionally. It further indicates that credit-card apps are starting to shape how top status is earned and maintained: Some 32% said using the app increased their spending with their primary card.
As more cardholders download and use institution-provided apps, banks and credit unions have more opportunities to influence when, how, and why members and customers use their cards. “Through their digital app, institutions can strengthen card usage, reassert their role in the customer or member relationship, and secure primary status as the top of wallet card for everyday spend” said Mitch Pangretic, National Director of Partnerships at Elan Credit Card.
For banks and credit unions looking to optimize their card programs, understanding the evolving dynamics is essential. Drawing on data from the Elan / PYMNTS report, The Financial Brand took a closer look.
Want more insights like this? Check out Elan’s content portal: Credit Card Issuance: Strategies & Solutions
Apps Enable Cardholders to Self-Segment
One of the most powerful reasons to deploy an app is that it lets a card program more effectively serve multiple market segments by enabling accountholders to select the features and functions that matter most to them.
Certainly, a large institution can maximize usage across segments by designing, branding, and managing multiple differentiated card products, and investing in extensive target marketing to develop their respective user bases. But that may not be sufficiently cost-effective for a smaller institution.
And the reality is, different user personas do use their credit cards for fundamentally different reasons. At a high level, financially constrained consumers use them as a liquidity tool, while financially stable consumers use them as a convenience and rewards product. In their research, Elan and PYMNTS broke this down further, identifying four distinct cardholder personas, each representing about a quarter of all respondents:
- Credit-dependent cardholders (the largest segment at 30% of the sample) rely on their card primarily to build or improve their credit score or to make purchases they couldn’t otherwise afford. This persona includes many Gen Z (43%) and financially-stressed consumers (40%).
- Convenience-focused cardholders (26%) use credit primarily for transactional ease and fraud protection, and tend to be older — 35% of baby boomers fall into this group, versus just 12% of Gen Z.
- Rewards-focused cardholders (22%) are motivated primarily by earning points, miles, or cash back, a category that skews toward financially-stable consumers.
- Cash-flow managers (22%) use their cards to bridge income gaps and cover emergencies, with financial stress as the defining characteristic; 34% of consumers struggling to pay bills fall into this group.
A well-designed app enables users in each cohort, and across cohorts, to build their own card experience — and positions an issuer to serve their user community’s full range.
What’s a Credit Card Really For?
Bank-issued credit cards were initially conceived as a way for an institution to put its balance sheet behind small transactions at the customer’s convenience. Later, as revolving credit was added, their role as a credit management tool deepened. But in truth the classic combination of plastic plus monthly statement — as revolutionary as it was in the history of consumer financial services — was never really up to the task of unlocking that value proposition in a meaningful way.
“Apps enable issuers to better deliver on credit cards’ promised value proposition,” Pangretic said, “giving accountholders a far more dynamic range of control over their credit activities.”
Cardholders generally rank account management and “alerts and monitoring” features as more important than convenience and personalization features. In the Elan / PYMNTS study, more than half of card app users (54%) say that payment due reminders and alerts help them avoid late fees and interest payments. Some 46% cite autopayment.
Notably, there’s a generational divide: baby boomers rely on alerts and autopay in equal proportion (53%). But while 49% of Gen Z rely on alerts, only 30% rely on auto-pay. The avoidance of autopay may be a function of Gen Z’s higher proportion of financial instability: autopay holds more risk for a consumer who is uncertain of their account balance at any given moment. Gen Z cardholders are also two to five times more likely than baby boomers to use more sophisticated credit management capabilities like budgeting tools, payoff planners, and interest calculators.
For many Gen Zers, and others operating under financial constraints, the credit card app is the platform they use to actively manage financial obligations. And when that card is their top-of-wallet choice, carrying most of their transactions, the credit management value proposition grows in significance.
The Power of Presence
One of a credit card app’s key advantages is its presence on the consumer’s phone, where notifications and integrations with calendars, email, and other apps can drive ongoing engagement. As such, they have the potential to bring the credit card into the center of a consumer’s daily life.
Rewards programs in particular, become more effective when cardholders can see the value of each potential transaction and redeem points easily. Some 40% of all app users say that identifying or redeeming rewards through the app encourages them to spend more on the card. Among rewards-focused cardholders, that figure rises to 50%.
Phone integration also gives smaller institutions a meaningful way to leverage local market knowledge in the battle for share of wallet, Pangretic said. For example, they might highlight local merchants in personalized offers or sponsor local events such as a community-based “restaurant week,” and then engage cardholders via push notifications and bonus rewards.
A Quality App Is Table Stakes
Consumers are increasingly factoring app quality into their decisions about which cards become their primary card, the Elan / PYMNTS report said. Its influence is strongest among credit-dependent cardholders, 77% of whom cite it as a decision driver, followed by cash-flow managers at 72%. That likely reflects the greater financial pressure these cohorts face and the extent to which they rely on cards as a necessity rather than a discretionary tool. The app is the interface through which they manage that reality day to day.
Not surprisingly, age is also a factor. The vast majority of Gen Z respondents (87%) said app quality influenced their top-of-wallet choice, with millennials close behind at 82%. Both are digital-native segments, of course. And Gen Z is the generation most likely to cite credit dependence as its primary card motivation. By contrast, just 46% of boomers and seniors say the same, suggesting a more discretionary pattern of use likely related to the cohort’s higher level of financial security.
Younger customers are also the most punishing when an app underperforms. Some 45% of Gen Z say a poor app experience has already led them to reduce or stop using the associated card compared with just 4% of baby boomers. (These rates compare with 24% for the sample as a whole.) Attrition risk runs across all four motivational segments, from 22% among rewards and convenience users to 29% among credit-dependent cardholders.
For traditional financial institutions looking to attract and retain next-generation customers and members in a world of digital wallets and fintech alternatives a well-designed app is an essential competitive tool. In a market where consumers hold an average of 2.1 general-purpose credit cards, a poor app experience may not end the customer relationship but it will likely redirect spending to another card.
What Issuers Can Do
Banks and credit unions concerned about the long-term sustainability of their credit card programs should consider whether a new or better-designed app could shift the odds back in their favor.
Elan’s Pangretic offered several recommendations for issuers looking to improve performance. Start by shifting the focus from adoption to activation: 16% of cardholders are aware of their app but have not installed it, and another 7% installed it and never used it. Design the app to serve differentiated user motivations rather than an imaginary average cardholder. That means offering a menu of features that can flexibly serve segments with diverse motivations and habits. At the same time, mind the fundamentals. Basic payment-management functionality — reminders, autopay, and alerts — matters to more than half of consumers across all categories. And because user experience is a retention factor, make rewards redemption easy and treat overall app performance as critical.
For community banks and credit unions whose value proposition centers on enabling members and customers to achieve their larger financial goals, all of this should sound like familiar territory. When issuers succeed in engaging cardholders through their apps, they gain a longer time horizon and a broader field on which to influence transaction behavior. Understanding that dynamic can help banks and credit unions reassert themselves in the competition for credit card primacy.
