How to Leverage Merchant Category Codes To Make The Most of Your Rewards
In part #1 of our Merchant Category Code series, we explained what MCCs are and how they work. Now, we’ll show you how to take advantage of them to make the most out of of your rewards cards.
Rewards cards and loyalty cards are a great way to shop, because they reward you for buying things you love. But if you don’t do your homework on Merchant Category Codes, you could miss out on a bunch of extra rewards. If you’re interested in making the most of your shopping and maximizing your rewards codes, here’s what you need to know:
First Things First: How Do Rewards Cards Work?
Rewards cards give you a set amount of points, cash, or other value whenever you shop at a specific location.
How Much Can I Earn With Rewards Cards?
Depending on the card, plan, or store, cardholders usually earn one to six percent on purchases. However, rewards cards use Merchant Category Codes (MCCs) to determine if a purchase is eligible for rewards points. This is especially important for cards that offer rewards from multiple retailers. Most cards that offer rewards on all purchases usually do so at the lower end of the rate scale (1 percent).
What Is A Merchant Category Code?
Merchant Category Codes (MCCs) are used to classify a business by the types of goods that they sell or the services that they provide. A MCC is a four-digit code assigned my credit card companies such as Visa, MasterCard, etc. These codes are based on the type of merchant the company is, for example grocery stores, clothing stores, office stores, airlines, etc. Rewards programs use Merchant Category Codes to decide on the rate in which a cardholder earns rewards.
How Are Merchant Category Codes Determined?
Purchases made in stores are automatically categorized by the MCC of the store. For information on this, see #1 in our Merchant Category Code series. This code impacts whether you will receive points, cash, miles, etc.
So Certain Cards Pay More For Specific Purchases?
Yes. Every rewards program has its own rules, discounts, and MCCs to target. Some cards will rewards extra (even double!) for certain categories, such as restaurants, sporting venues, grocery stores, gas stations, etc. All programs vary, and some rewards cards will pay out more rewards benefits than others.
How Can I Find Out What the MCC is for a Specific Store?
You can use the Visa of MasterCard Supplier Locator to look up MCCs for stores you shop at. For a full list of Merchant Category Codes, click here. Some locations of the same store have different Merchant Category Codes–some store locations may be labeled “grocery store” versus “electronic store” or “discount store”–so do your homework.
How Can I Use MCCs to Get Additional Rewards
Some large-scale retailers have multiple MCCs due to having multiple departments, so the items your purchase will be categorized with a different MCC depending on which part of the store/counter the items are purchased at. You can use this to your advantage if your card only rewards a specific MCC, for example if your card offers an extra rewards for electronics you could bring all of your purchases to the cashier in the electronics section, and they will be categorized as electronics. Be sure to make your purchases in the proper area to get additional value and make the most of your rewards.
Help! I Checked the MCC of My Store, But I’m Not Getting The Right Rewards.
Some rewards cards have a cap on the amount you can earn. If you happen to hit your quarterly or yearly cap, you won’t receive any additional rewards. Make sure to read the fine print and contact your card issuer if you think there has been a problem.
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