If you use a credit card that offers cashback or other rewards based on your spending, there’s an invisible four-digit code you should probably know about.
We’re talking about the merchant category code (MCC), which determines what rewards you can get on your rewards or cash back card.
Every business that accepts credit cards from major networks (Mastercard, Visa, American Express, Discover), is given an MCC to help the issuers organize and track purchases. For example, if you swipe your credit card at a grocery store, each issuer assigns that store a 4-digit code that designates “grocery store” purchases.
While the MCC doesn’t matter for the basic function of your credit card, it is a critical part of how many credit cards classify rewards and cash back based on spending in different categories.
If a card rewards something like 3% cash back on grocery store purchases, that’s because a specific MCC tells it to. You’ll only get 3% for purchases at stores labeled with that specific “grocery store” 4-digit code.
This might get tricky if you buy groceries at a store like Target or Walmart, since they may not be categorized with a grocery code, but rather a drugstore or homegoods code. A store’s MCC can vary between the store’s locations, and even which counter you check out at inside.
It’s also not exactly as easy as looking up the MCC for a store before you shop. The best way to find out what your purchases are coded as is, unfortunately, trial and error. You can find the MCC for different purchases/stores on your credit card statement, so your best bet is to go back into your statement and see exactly how the merchant description is coded so you know for future reference.
It might look like this (the category code is at the top: Merchandise & Supplies — Groceries) :
For Visa and Mastercard purchases, there are a few ways you might be able to find out the code for a purchase type ahead of time:
- The Visa supplier locator lets you search the MCCs of stores in your area
- Mastercard also provides a macro list of all of its MCCs, but there’s no way to look up the exact codes of stores in your area
If your credit card isn’t in one of those networks, contact your processor and ask how to find their MCCs.
Business credit cards with rewards structures also use the MCC for determining spending categories. Business owners can also use the MCC to prevent transactions from certain MCCs from being accepted.
If you give an employee a card to take clients out for meals, for example, you might block transactions from MCCs labeled for purposes other than dining. Contact your issuer if you have a business card and want to put MCC restrictions in place for your employee cards.