By Ray Birch
REDWOOD CITY, Calif.—A surprising number of Americans are sitting on the financial sidelines, not because they’ve been turned down for a credit card, but because they assume they would be.
New research from i2c Inc. shows that 42% of consumers believe they would be denied a card if they applied—nearly three times higher than the actual denial rate.
That gap between perception and reality represents a major opportunity for credit unions, says David Durovy, senior vice president of transformation at i2c.
“What the data shows us is a psychological barrier,” Durovy explained. “People are self-selecting out of the credit market because they fear rejection, even though many of them have a strong chance of approval.”
The misperception didn’t emerge in a vacuum. Durovy points to several forces shaping consumer attitudes in recent years. The pandemic accelerated a rapid digital shift, moving most interactions between consumers and financial institutions onto smartphones and away from in-person conversations.
“When you no longer speak to a banker or credit union representative, you miss the chance for reassurance and education,” Durovy noted.
At the same time, much of credit card advertising has highlighted luxury rewards and aspirational lifestyles—images of beaches, travel, and elite perks. For households just trying to manage monthly bills, that kind of messaging reinforces the notion that cards are for someone else.
“The reality is that credit is often used for everyday expenses—groceries, household cash flow, covering unexpected costs. But that’s not the story consumers are hearing,” Durovy said.
A Role For Financial Education
Breaking down that barrier will require more than just approving applications. It starts with education, myth-busting, and targeted outreach, Durovy stressed.
“Credit unions and banks need to weave financial education into their messaging—explaining how credit cards work, how to use them responsibly, and how they help build credit,” he said.
Consumers often underestimate their own creditworthiness. The study found that younger consumers and those in prime or subprime categories are especially focused on building their credit scores but don’t realize how accessible starter credit products can be.
“We’re talking about confidence as much as credit,” Durovy said.
Why Credit Unions Are Uniquely Positioned
For credit unions, this “credit confidence gap” is more than a problem—it’s an opening. Unlike national banks that rely heavily on mass marketing, credit unions have deep ties to their communities and personal knowledge of their members. That gives them a chance to tailor messages to local needs and help underserved populations step into the financial mainstream, Durovy explained.
“This is a tremendous opportunity for credit unions,” Durovy said. “They know their members better than anyone else. They understand the community dynamics and can speak directly to people who might think credit is out of reach. A card program, backed by education and personalized communication, could be the tip of the spear in welcoming new members.”
Credit unions can also reframe the value proposition away from elite travel rewards toward the everyday benefits members care about—flexibility, responsible credit-building, and access to affordable solutions when life gets unpredictable.
The i2c study highlights that consumers want more flexible credit options, with many even willing to pay for enhanced features that fit their real-world needs. But before they can get there, someone has to bridge the gap between fear and reality, insisted Durovy.
“Ultimately, it’s about helping people see that credit is not beyond their reach,” Durovy said. “If credit unions step into that role, they’ll not only grow their card portfolios but also fulfill their mission of serving the underserved.”