Innovating on Customer Behaviors: The Case for Credit and Debit Rewards Programs

Aug. 09, 2022

While the effects of COVID slowed consumer credit card spending, the first half of 2022 has pointed to a return to pre-pandemic behaviors. In fact, the Federal Reserve Bank of New York reported that in the first quarter of 2022 credit card balances have risen $71 billion higher than the same period in 2021. That return to card usage brings with it opportunities for community bank innovation.

“Engagement should be looked at from a digital-first standpoint, and community banks want to revamp their loyalty programs for this digital environment,” shares Damon Moorer, president and CEO of TCM Bank, ICBA Bancard’s credit card bank. “Consider a money wellness platform or highlight different offers and features through the digital experience. With fintech options out there, you can partner with organizations to help you create that type of experience.”

By delivering value for customers that helps support their financial goals community banks can earn top-of-wallet status from savvy customers who use their cards to earn rewards, while remaining cognizant of their balance.

“We’re seeing elevated spend and one of our lowest revolve rates,” Moorer says. “But with inflation and market changes, this may not be the case going forward. We’re reading the book as it’s being written.”

As the plot unfolds, Moorer recommends continuing to focus on the competitive advantage an attractive rewards program can bring. For example, cash back programs remain highly popular with consumers, with 76 percent reporting cash as their preferred rewards currency. Another 49 percent indicate they want to have that cash-back feature immediately available in their account.

“We’re facing elevated competition from nonbank players, and we need to continue looking for new cardholders and accounts,” says Moorer. “Rewards are a relevant value proposition for customers to remain engaged, and they are critically important on both the credit and debit side.”

The Debit Card Opportunity

While debit card rewards may be less commonplace today than their credit counterparts, they still present an opportunity for community banks. Take, for example, FINTX Rewards, a debit rewards program designed and developed by the team at Kleberg Bank in Corpus Christi, Texas. The $700 million-asset bank offers a customizable cashback program that can be white labeled for community banks. Through data automation that operates behind the scenes, FINTX Rewards helps community banks create custom cashback incentive programs and automate the process—reducing manual efforts and creating a seamless customer experience.

“FINTX Rewards gives banks the ability to drive what they want and see as the most valuable customer behaviors,” said Kleberg Bank president and CEO, Gabe Guerra. “We’re rewarding customers for behaviors that drive revenue and opportunity.”

The rewards program was designed to allow for different buckets of opportunity based on customer dynamics, minimum account balances, and different value propositions, Guerra explains. For example, the account may have a monthly fee associated with it, but that fee can be waived based on account balance and card usage.

This model has worked well for the bank. Average deposits per account have nearly doubled and card usage has increased, making the cashback incentive an effective approach for deepening the customer relationship. This program also has resulted in additional business in other areas of the bank and reduced costs in the form of third-party software expenses no longer necessary for the in-house offering.

“With this rewards program, the customer relationship becomes stickier, and that enabled us to provide more services,” Guerra says. “It creates value for the bank, and we structured it to build real value for our customers at the same time.”

For more information on rewards programs, download ICBA Bancard and TCM Bank’s white paper, “Cultivating the Strategic Value of Credit Card Rewards Programs.” For more information on FINTX Rewards, visit