The merchant category code helps to categorize the merchants depending on the goods and products they sell. The credit card companies use these codes to determine the type of rewards that can be offered to the customers. So, as a consumer, it’s worth knowing about it to get the best out of the reward system.
What is an MCC code?
The MCC code helps the card companies identify the type of business so that they can allocate the appropriate reward point. It’s a four-digit code that tells what the merchant sells. You will find the merchant category codes on the list published by the IRS and also on the websites of the respective credit card providers like VISA and MasterCard.
Why MCC code is important?
MCC code affects the reward points you get. A cardholder must understand the MCC code to take full advantage of the reward points system. The credit cards may offer a flat reward rate, which can the merchant category code is not of any use. But when they offer varying rates, knowing the MCC code can give you more reward. For example, you are entitled to reward when you shop at a grocery store, but the Walmart in your locality may not be categorized as a grocery store. So, when you shop from there you won’t get any reward. Knowing the MCC codes of stores in your area can help you shop in a better way.
You can get statement credits on certain credit cards. These credits are for a specific type of transaction. So, you should know what type of transaction you should do to get those credits. This you can know from the MCC code. For example, a travel agent is giving you an annual credit of $500. But when you make certain travel-related purchases, your credit goes down. So, if you have a plan to use the full amount of credit for any travel purposes, then you should restrict buying travel-related things using that card. This can be only possible when you know the MCC code of that business.
Finding the MCC code can be a bit complicated. If you are a VISA cardholder, then the work is quite straightforward for you as they have an online tool to find the MCC code of businesses. But if you are using other cards you will need to look up other sources to find the MCC codes.
