Airlines are dipping their loyalty programs back into debit cards after an extended hiatus, drawn by the large segment of consumers who don’t use credit cards.
Two U.S. carriers, Southwest Airlines and United Airlines, introduced a new debit card within the past month, following a similar debit loyalty card from Wyndham Hotels & Resorts earlier this year. The cards allow for points and miles accrual, along with introductory bonus offers, although at levels that are far less generous than higher-fee credit cards.
United introduced its loyalty debit card on Nov. 4, one week after Southwest debuted its new card. All three debit cards are issued by Sunrise Banks and were developed by Galileo Financial Technologies, a card and payment platform operated by SoFi Technologies, a San Francisco-based fintech.
The Visa-branded debit card was United’s “direct response to the needs of the modern, debit-first traveler,” an airline spokesperson said Wednesday in an email. “We saw a significant and underserved group of travelers — especially among Millennial and Gen Z flyers — who prefer the financial control of a debit card but were excluded from the best travel rewards.”
Some 90% of U.S. adults have a debit card, spending about $4.3 trillion on these cards, Galileo Financial said in an email. Additionally, some 46 million Americans have thin or nonexistent credit history, leaving them unable to participate in credit-based loyalty programs, Galileo said.
“These co-brand debit programs let airlines meet customers where they already are, give them a path into loyalty, and create engagement with a segment that’s been overlooked for years,” Bill Kennedy, Galileo’s interim CEO and chief financial officer, said in an emailed statement.
The new cards come after more than a decade in which airlines and hotels have focused their loyalty schemes around credit cards, with an expanding array of retail perks and airport amenities — coupled with far higher fees than in the past. American Express, for example, revamped its platinum cards in September, with an annual fee of $895, months after JPMorgan Chase introduced its revised $795 Sapphire Reserve card.
A spokesperson for Dallas-based Southwest said the carrier’s goal with the new card is “to offer a rewarding experience to those who prefer debit cards over credit cards, or those looking to maximize their rewards with both debit and credit cards.”
Wyndham’s Mastercard-branded card was “designed for younger travelers as well as those who prefer a debt-free lifestyle,” according to a March press release from the hospitality chain, based in Parsippany, New Jersey.
“Travel brands are seeing something very clear in their customer data: people are using debit more than ever, especially for hospitality and everyday travel purchases, yet they aren’t earning anything on that spend,” Kennedy said. “The debit-first traveler is a very large and very real segment.”
As with their co-branded credit cards, multiple U.S. airlines, like United, offered debit rewards cards in the years before the 2010 Durbin Amendment capped interchange fees on debit transactions for large banks, reducing the cards’ profitability. Chicago-based United, for example, ended a prior debit card in 2011.
Smaller banks with less than $10 billion in assets – like St. Paul, Minnesota-based Sunrise – are exempt from the amendment’s interchange limits. “The economics would be very hard to manage” for a large bank wanting to issue a debit rewards card, Eric Schurr, Sunrise Banks’ chief payments strategy officer, said Wednesday in an interview.
The airlines’ new debit cards carry monthly fees that can be avoided with a minimum account balance at Sunrise. United waives its $4 fee if an average account balance is at least $2,000; Southwest waives its $6.99 fee for balances of $2,500 or more.
Another factor in the renewed interest in debit cards is “consumer stress” and the large number of Americans who eschew credit, Schurr said Wednesday.
“We are seeing uncertainty driving this preference towards trying to get control of spending,” he said. “We have seen more brands and non-financial companies look at the way that money moves and they are looking more at these types of solutions. It’s not just about driving loyalty.”
The travel brands’ Sunrise debit cards generate as many as 1,000 new accounts per week, Schurr said.
The Federal Reserve has noted a correlation between income and a propensity to pay with a debit or credit card. For households with incomes below $50,000, nearly three-quarters (73%) chose to pay with debit cards, while 91% of households with incomes of $100,00 or more selected credit cards, according to the Fed’s findings from its 2025 Diary of Consumer Payment Choice.
“As [household income] increases, the shares of cash and debit card payments decrease, and the share of credit card payments increases,” the Fed report noted.
