78 Million Americans Changed Their Main Credit Card—Banks May Need to Offer Them a Reason to Return

More than one-third of U.S. credit cardholders say they have switched the card they use most within the past two years, and most did not have to apply for a new card to do it. Instead, they simply started using a card already sitting in their wallet. That makes a strong case for customer retention incentives. But it also suggests those rewards can teach people that the way to get paid is to stop spending.

A new PYMNTS Intelligence study, conducted with Elan Credit Card, surveyed 2,460 U.S. cardholders in June. It found that 36% had changed their primary card over the previous 24 months, which the report estimates amounts to about 78 million people. Even when the account stays open, spending can shift well before a customer actually cancels.

Most People Who Switched Already Had Another Card Ready

Among those who changed their main card, 58% moved an existing card into the top spot in their wallet. Only 42% opened a new card to become their primary one.

• 71% made the decision within a month, and 78% considered no more than two cards.
• 46% said their former issuer never contacted them before they switched. Another 37% said they reached out to the bank themselves but did not receive an offer that kept them.
• Better rewards were named by 38% of switchers, a higher credit limit by 36%, an upfront bonus by 30%, and a stronger app by 24%. Respondents could choose more than one reason.
• 56% of Gen Z cardholders had switched, compared with 18% of baby boomers and seniors.

I recently wrote about moving my everyday spending from Venture X to Bilt Palladium. I am keeping Venture X for its perks, including lounge access. Capital One still has me as a cardmember, but that is not the same as getting my day-to-day spending.

Keeping the Account Open Is Not the Same as Winning Back Spending

Retention offers often appear when a customer calls to cancel, frequently after an annual fee posts. Sometimes the bank offers a bonus, sometimes a statement credit, and sometimes nothing at all. What gets offered may depend on how valuable the customer is or on the bank’s broader goals for that card portfolio.

If a bank gives someone a reason to start using the card again, some customers may continue even after the bonus is earned. But paying someone merely to delay cancellation, make a few purchases, and then put the card away again is not a profitable outcome.

Banks also make spending offers without waiting for a cancellation call. In April, I covered an Amex Business Platinum promotion that offered an existing cardholder 200,000 bonus points after $59,000 in spending, repeatable three times. That could total 600,000 bonus points, not counting the points earned on the purchases themselves.

The Challenge Is Finding Offers That Actually Work

PYMNTS argues that banks are relying on fee waivers when customers say they want loyalty bonuses, higher credit limits, and stronger rewards. Among switchers who received a retention attempt, 32% reported a fee waiver or reduction, 31% a statement credit or cash back, and 31% bonus points or miles.

But these were people who switched anyway. Customers who accepted a fee waiver and stayed are not part of that comparison. So the data shows what some unsuccessful offers looked like, not which offers actually succeeded.

The report compares the offers received by 335 switchers with what all 884 switchers say would have kept them.

Only 13% said nothing could have persuaded them to remain, which the report reads as evidence that most departures could have been prevented. But survey responses are not the same as real-world behavior, and the question of what retention bonus works always comes down to the margin. There is always a price that can win a customer, but it is often too high to justify.

The report’s dismissal of fee waivers is especially notable given that 23% of switchers cited a new or higher fee.

What This Could Mean for Future Card Offers

We may see more efforts to win back spending before a customer asks to close an account. That is the direction the report recommends, and it builds on offers banks already use:

• Bonuses tied to falling usage. A bank notices purchases dropping and offers extra points for spending over the next few months. That could reach a customer early, although the study does not show whether declining use gives enough warning before the decision is already made.
• More incentives designed to build a habit. Monthly spending bonuses, extra rewards in categories a customer already uses, and repeated reasons to reach for the card. The bank then has to see whether that behavior continues after the promotion ends.
• More focus on younger users and the mobile app. Among Gen Z switchers, 31% cited a better app, while 35% pointed to rewards and 33% to credit limits.
• But not as much additional lending as the report implies. The report encourages banks to pay attention to financially stretched customers. Wanting more credit does not prove that extending it will be profitable. People who want more credit are often the last people you want to extend it to, and the survey does not measure credit losses.

Retaining a customer is often easier and cheaper than acquiring a new one. Many banks concentrate too heavily on acquisition, and they rarely reveal how many cardmembers leave a portfolio. Keeping customers active and spending should probably receive more investment, but that can be difficult to justify internally when the bank has already spent money to acquire them and may not have recovered that cost yet.