Review Purchase Categories for Credit Card Rewards

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One of the reasons why we put 99.9% of our spending on credit cards are for the rewards. A few percent back in cash or reward points isn’t going to make anyone rich, but it’s a little better than getting nothing back if you are responsible. At the moment we only use two credit cards so keeping the bonus rewards categories in order is fairly simple, but there was a time when I used as many as four cards.

One important lesson I learned early on was that not all purchases are categorized as you would intuitively expect. It’s important to check your statement to find out whether it’s being coded how you expect and change which card you use accordingly. Let me explain with a few examples.
With your purchases, don’t assume that your favorite restaurant is categorized as a restaurant. Review your statement and each purchases’ “Merchant Category” to confirm it’s marked the way you think it is. (Citi calls it a Merchant Category, American Express and Discover call it a Category, you get the idea)

For example, on any Citi Card statement, each transaction breakdown will include the Merchant Category. You may be surprised at how certain purchases are coded (the merchant elects this). For example, is considered a bookstore by Citi. is a Bookstore

A prime example of ambiguity is if you dine in a hotel restaurant. Depending on the hotel, your purchase may be considered a “lodging” purchase or a “restaurant” purchase. We recently attended a wedding at the Renaissance Hotel and I bought some drinks at the bar. If it were a standalone bar, I’m almost certain the purchase would be considered a “restaurant/eating place” purchase. It, however, was considered a “lodging” purchase on my Citi card because the Renaissance Hotel charged my card. Now that I’m aware of this, I’ll use a card that gives me higher rewards on lodging, even though I’m using it in a restaurant.

In these one-off situations, it’s not important to know how the purchase will be coded. If you often find yourself in a hotel bar, find out how the purchase will be coded (by reviewing your statements after the fact) and you can earn a little extra cash back.

Take a look at your statement, surprised by any of the categories?

{ 12 comments, please add your thoughts now! }

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12 Responses to “Review Purchase Categories for Credit Card Rewards”

  1. cubiclegeoff says:

    I was talking to my wife about this the other day. Our Chase card gives 3% on fast food purchases, but many places don’t end up being categorized that way, sometimes like Au Bon Pain and other more high-end fast food, so instead we decided to just put all those purchases on our other card.

  2. Anytime that I’m a little worried about whether an establishment will count under a certain category I use my 2% CB Schwab card. But with a few minutes looking over the statement I’m sure that on some repeat purchases I could be doing better. Thanks for the tip

  3. cdiver says:

    I wish PenFed categorized your purchases in such a way.

  4. Arohan says:

    Never thought about paying such a close attention to how the purchase was coded. We just adjust our credit card usage to whatever rewards specials the credit card company is running at the moment. So if Citi is offering 2x points for gasoline we make sure to use Citi card for gas.

    Amex business offers pre-negotiated discounts at certain stores (like Fedex, Kinkos, Car rentals, etc) which are on top of the reward points you earn. Some of these discounts can be in 5%+ range so this is a great deal as well.

  5. javi says:

    I do look at my statements to maximize my rewards. My Chase card for dining and my Citi card for gas and groceries. Since I use these services often, might as well get a bonus.

  6. Shirley says:

    I was surprised to find that all purchases made at our local TowerMart (convenience store/gas station) are considered gasoline. Slurpee for the car, maybe? 😉

  7. Scott says:

    I think the biggest example of this is most credit cards do not categorize Wal-Mart as a grocery store, but they do categorize, say, Meijer, as a grocery store. It has to do with where their roots are. Meijer started as a grocery store, Wal-Mart did not.

    • Martha says:

      I had the same situation, I get 5% back on all car-related purchases, gas, maintenance, etc. I was going to Wal-Mart for my oil changes and expecting to get 5% back, but Discover doesn’t recognize that individual purchase as “car related” so I wasn’t getting the full 5%!

  8. eric says:

    Sometimes it drives me nuts because the categories aren’t what I expected…restaurants vs fast food etc.

  9. I keep track of this every month, especially with the floating categories they now have for my Chase Freedom and Discover cards. I would be really mad if I bought a major purchase and it ended up in a different category that I expected.

  10. never knew says:

    I just found out after years of getting gas at the same place,(Quick Trip) it never counted as “gas purchase”. GREAT!! So, does anyone know where we can look up a merchant to find how they are categorized BEFORE we purchase? I looked all over web for this, no avail.

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