60% of Debit Cardholders Turn Direct Deposit Into Loyalty

For years, credit cards have monopolized the loyalty market. But as younger consumers trade borrowing for budgeting, the most meaningful shift may be happening on the other side of the ledger: debit.

Research from PYMNTS Intelligence and Galileo Financial Technologies finds debit cards — long treated as cash’s quiet cousin — are now the cornerstone of a new loyalty model designed for a generation that prefers control to credit.

The report, “Rethinking Rewards With a Loyalty Platform for the Debit Generation,” traces how changing credit conditions and consumer sentiment have opened space for co-branded debit cards that look and feel like traditional rewards programs, without the debt risk.

Galileo’s new platform, launched with Wyndham Hotels & Resorts, offers a “turnkey, loyalty-first” approach: a full-stack financial infrastructure that lets brands reward debit users directly, sidestepping the regulatory and economic hurdles that once made such programs unviable.

At its heart, the shift isn’t just about payments, it’s about access. More than 60 million U.S. consumers now identify as “debit-first,” many of them younger, credit-averse and eager for recognition. The report argues that brands ignoring this audience risk missing a generational inflection point in loyalty economics.

• 60% of new debit users in Galileo’s pilot program with Wyndham set up direct deposit, an unusually strong signal of long-term engagement for a product that doesn’t involve credit.
• 27% of U.S. debit users fall into the “debit devotee” category identified by Mastercard, spanning three personas — Futurists, Transcenders and Survivors — who seek perks without revolving debt.
• 90% of U.S. adults use debit cards for everyday spending, yet the vast majority of brands still reserve rewards for credit customers.

What makes Galileo’s model notable isn’t just its technology, but its repositioning of debit as a loyalty instrument rather than a payments tool. By taking on the heavy lifting tied to product design, infrastructure, risk and compliance, Galileo lets brands treat debit as a marketing channel.

Instead of building a new payments business, they can plug into a ready-made loyalty platform, paying only for points earned or redeemed. That predictability, the report notes, appeals to marketers managing tighter budgets and to finance chiefs wary of subsidizing credit risk.

Wyndham’s early results suggest that modest perks can deliver meaningful loyalty. The card’s benefits — automatic Gold status, gas-spend rewards and maintenance-fee waivers for higher balances — were intentionally conservative, yet they drove adoption rates comparable to mid-tier credit cards. The real signal, according to the report, was the level of customer “stickiness” generated through direct deposit setup, which often anchors long-term account activity.

The trend arrives as lenders tighten underwriting and as younger consumers redefine what financial freedom means. Debit rewards, once dismissed as uneconomical after the 2010 Durbin Amendment capped interchange fees, are being revived through smaller sponsor banks that aren’t subject to those limits. Combined with API-based infrastructure, the economics now work, and the loyalty logic follows.

For brands, the implications go beyond cards. The report envisions a future in which loyalty ecosystems become interoperable, where a hotel stay could earn perks redeemable with an airline or coffee chain. For consumers, debit rewards could turn everyday spending into recognition without revolving debt.

In that sense, Galileo’s experiment with Wyndham may be less about plastic and more about psychology. Loyalty is shifting from how much consumers borrow to how much they engage. And debit, once an afterthought, is becoming the new currency of trust.

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