What is Merchant Category Code (MCC) and Why is it Important for me?

Get the knowledge and tools to let your credit cards work for you.

Introduction

The concept of Merchant Category Codes (MCC) plays a significant role in the everyday lives of us. We will explore the importance of MCC for you, how it impacts credit card rewards, cashback programs, and financial planning. We will also share valuable resources that provide more insight into MCCs and how you can make the most of them.

What is Merchant Category Code (MCC)

A Merchant Category Code (MCC) is a four-digit code assigned to businesses by credit card networks such as Visa, Mastercard and American Express. It classifies a business based on the type of goods or services it provides, creating a standardized system for payment processors and card issuers to identify the nature of a transaction. The primary purpose of an MCC is to streamline transaction processing, help with tax reporting and compliance, and enable credit card rewards and cashback programs based on specific merchant categories.

Why is the MCC Important for me?

I Want to Maximize Credit Card Rewards and Cashback

A primary reason MCCs are important for you is their direct impact on credit card rewards and cashback programs. As explained in the Seedly blog post, many credit card issuers offer bonus points, miles, or cashback based on the MCC of the merchant where a purchase is made. By understanding the MCCs associated with your favorite stores or service providers, you can maximize your rewards and save money on your purchases.

Some credit card rewards programs have exclusions or limitations based on MCCs. The MileLion blog post explains how certain merchant categories, such as government services, insurance providers, and educational institutions, may be excluded from earning rewards points or miles. By being aware of these restrictions, you can make informed decisions about your spending and rewards strategies.

For Financial Clarity and Budgeting

MCCs and merchant information can also be useful for you when it comes to financial clarity and budgeting. By having the ability to know what merchant name and category the spending belongs to on your statement, you can be more assured that there are no suspicious charges. As mentioned in the MoneySmart blog post, analyzing your credit card statements and categorizing your spending based on MCCs can help you identify patterns in your spending habits. This information can be valuable when creating a budget or trying to cut back on specific spending categories.

Verifying Merchant Category Codes

Finally, it's essential for you to verify the MCCs of the merchants they frequently shop at to ensure they are maximizing your rewards. There used to be a hacky way to check MCC with the now-gone Visa Supplier Locator. Now there’s no straightforward way to check MCC or know what is the best credit card to use. That’s why we built MCC search and “Which card to use” features into Max (heymax.ai) - a simple way to know the details about a given merchant, and know which of your many amazing reward credit cards would be the best to use. See example:

Conclusion

By being aware of the role MCCs play in credit card rewards, cashback programs, and financial planning, you can make informed decisions about your spending habits and maximize your credit card rewards. By leveraging the resources mentioned in this blog post, consumers can take control of their finances and make the most of their credit card rewards programs. If you want to know more about the merchant you shop at or which card to use, give Max a try and let Max automate your life of maximized reward potentials!