Rewards cards: What you see isn’t always what you get
Your card purchases may not be recorded in a way that earns you points or cash back
Ted Rossman has seven years of experience in the credit card and personal finance industries as a member of the award-winning communications department at CreditCards.com and its sister sites The Points Guy and Bankrate.
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I was surprised by the way several of my recent credit card transactions were recorded. For example:
- A whale watching cruise that my daughter, father-in-law and I took during our Thanksgiving vacation in California showed up as “other entertainment.” I was hoping my Wells Fargo Propel American Express® Card would count this as travel (a 3 percent category rather than 1 percent). A nice try, but no luck.
- The cafeteria at the Monterey Bay Aquarium was categorized as “fees/service charges/dues” – a lost opportunity for 3x dining points on the Propel Card.
- A bakery at Newark Airport counted as “gifts,” not dining, which cost me a few more rewards points.
- My wife saw a movie at a local art house theater, and her ticket and popcorn were both considered charity purchases (I assume because the theater is a non-profit).
- Interestingly, our annual membership to the Bronx Zoo (another non-profit in the entertainment space) showed up as “leisure activities.”
- Martha & Marley Spoon (a meal kit service my family receives once a month) was coded as grocery shopping by my Capital One Quicksilver Cash Rewards Credit Card. Realizing this, I should put future orders on my Blue Cash Everyday® Card from American Express, which provides 3 percent back on groceries, rather than the Quicksilver (1.5 percent on everything). It’s not a loss in the near term, however, because I’ve already hit the annual $6,000 maximum on the Blue Cash Everyday’s grocery category.
- Two other unexpected “grocery” locations were a local pumpkin patch and a restaurant in town.
- I signed up for an Amex Offer (spend $40 or more at Etsy and get $10 back), but I didn’t get the credit because the transaction was logged as a PayPal merchant charge instead of Etsy itself.
See related: 6 tips to get started with credit card rewards
These missed rewards opportunities might be an important cautionary tale for you, particularly if you’re buying expensive items. This topic is also very important if you have the Capital One Savor Cash Rewards Credit Card or are thinking of applying for it. That card’s 4 percent entertainment bonus is both compelling and confusing.
Capital One says it counts the following as entertainment: “Buying tickets to a movie, play, concert, sporting event, tourist attraction, theme park, aquarium, zoo, dance club, pool hall or bowling alley. Also, making purchases at record store and video rental locations.”
But as I noted above, I don’t think my wife’s movie night or my family’s zoo membership would have counted. I’ve seen numerous complaints from cardholders who didn’t get the 4 percent they thought they would.
Capital One alludes to this in the fine print: “Every time you buy something, the merchant assigns your purchase a category code. We use these codes to figure out how much cash back you earn. Please note, Capital One is not responsible for codes used by merchants.”
They’re talking about MCCs (merchant category codes). Our sister site NextAdvisor has a good post explaining what these are and how to try to track them down ahead of time. The Visa Supplier Locator mentioned in that article is the best resource I’ve come across, although it’s not that easy to use, and there’s no guarantee your card will represent the transaction the same way. For instance, my Quicksilver card (which is a Visa) says Jet.com is a grocery store, yet the supplier locator lists Jet.com under “discount stores/warehouse/wholesale” (which sounds more reasonable).
Your best course of action is trial and error. Put a transaction – ideally a small one – on your desired card and see how your rewards are credited. That’s the best way to determine how to utilize your existing cards and evaluate potential new sign-ups.
You can also ask your card issuer to correct a mistake if you think something was miscategorized (that worked for this writer). But I’d only count on that occasionally. Ultimately, we’re all beholden to MCCs, even if you didn’t know what they were until reading this column.