Maximizing Your Credit Card Rewards

by Michael on Jul 12, 2013 · 1 comment

Rewards Straight Ahead Sign

Today I want to share with you a quick tip for maximizing your credit card rewards

You know how some card issuers offer bonus rewards for purchases in certain categories? Well, have you ever wondered how they keep track of which merchant is which category?

The secret is in something called the Merchant Category Code (MCC). The MCC is a four digit code that denotes the type of business that’s reporting a given charge, and it’s up to merchants to categorize themselves.

While the distinction between store types might seem obvious, not everything is at it seems. Probably the most important place to make this distinction relates to grocery stores since: (1) groceries a major expense for many people, and (2) many reward credit cards give bonus rewards for grocery purchases.

Well, guess what? A number of big box discount stores are actually coded as grocery stores. When combined with the fact that cards offering as much as 6% cash back on groceries are readily available, you can save a nice chunk of change by knowing which card to swipe when/where.

Identifying merchant categories

But how do you know which stores are categorized as what? Sure, you could experiment to find out. But that’s not particularly efficient. Instead, why not just look it up? While I haven’t been able to find publicly available databases for American Express, Discover, or MasterCard, this info is readily available for Visa.

Simply click this link to visit the “Visa Supplier Locator.” Once there, you can search for merchants based on name or address and find out which MCC they’re reporting to Visa. While there are no guarantees that the other card issuers will use the same codes, my experience has been that they almost always do.

Unexpected grocery rewards

So what have I learned from searching this database? Well… The nearest Target to our house is coded as:

GROCERY STORES/SUPERMARKETS/BAKERIES

but the next nearest Target store is coded as:

DISCOUNT STORES/WAREHOUSE/WHOLESALE

So purchases at the former are subject to the higher level grocery rewards whereas purchases at the latter will likely earn cash back at standard reward rates. And yes, when you make a purchase at a store coded as grocery, everything that you buy (groceries or not) will get preferential treatment.

Similarly, six of the seven closest Walmart stores are coded as grocery stores, whereas the odd one out is coded as a discount store. Note that most Walmart stores seem to have dual codes, with a separate code for pharmacy purchases — presumably those that are rung up at the pharmacy counter.

That last bit of info is actually useful in itself, as it means that you can also get drugstore-level rewards (if/when your cards is offering bonuses at drugstores and pharmacies) when having prescriptions filled at Walmart.

Maximizing your cash back

While there are good “all around” cards out there — e.g., the 2.2%-on-everything Barclaycard Arrival World MasterCard (plus a $444 signup bonus!) — you can use this trick in combination cards that offer bonus rewards for certain categories (such as the Discover it card) to maximize your savings.


1 Thomas | Your Daily Finance July 13, 2013 at 7:01 am

Thanks for the information. I am actually new to the idea of credit cared rewards so it seems every day I am learning something I never knew. I guess it really does pay to keep up with information. That could be a lot of potential savings if you know which codes are being used. Grocery is a large expense.

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