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Not all travel qualifies for rewards bonus points

Summary

Check your card’s terms to see how it defines ‘travel’ so you can maximize your rewards properly.

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Dear Cashing In,
What are eligible travel expenses that will earn 3 percent on the Costco Visa? We will be traveling with Road Scholar (formerly Elderhostel) to Europe. Will it qualify for the 3 percent travel bonus? – Eileen

Dear Eileen,
Using the right card at the right merchant can be a great way to boost your rewards and allow you to more quickly earn cash or free travel from your credit cards. While some cards earn a flat rate for every purchase – say, 1 percent back on everything – many other cards give you bonuses for using your card on certain categories of spending.

These bonuses vary by card, of course. The most common bonuses are for spending in categories such as gas, restaurants and travel, though other bonus categories might include grocery stores, office-supply stores and certain retailers or travel providers, particularly if it is a co-branded card with that retailer or travel provider. There are even cards that rotate the bonus categories quarterly, such as the Chase Freedom Visa (no annual fee) and Discover it Card (no annual fee).

If you have multiple cards – and most people do – make sure that you use the correct card at locations that give bonuses on that card. For instance, if you have one card that gives double points at restaurants, make sure you use that card every time you go to a restaurant. That sounds simple, but it’s often easy to forget.

Just how do you know what qualifies as a merchant in a bonus category? Sometimes, you don’t. Every company that accepts credit cards has an assigned Merchant Category Code (MCC), which card issuers rely on to determine whether you receive the bonus points. Usually, you know. For instance, the Applebee’s on the corner is almost certainly a restaurant. But purchases at the coffee shop inside the Barnes & Noble bookstore might be classified as a restaurant or as a bookstore.

One helpful tool I know of is the Visa Supplier Locator, which allows you to search for merchants and reveals their MCCs.

There are a number of cards that offer bonuses on travel spending, though they differ in how they define eligible travel purchases. These cards include:

  • Chase Sapphire Preferred (annual fee: $95, waived first year).
  • Citi Prestige (annual fee: $450).
  • Citi ThankYou Premier (annual fee: $95, waived first year).
  • AAA Member Rewards Visa (no annual fee).
  • Sam’s Club MasterCard (no annual fee, with paid membership).

A new card that debuted this summer is the Citi Costco Anywhere Visa (no annual fee, with paid Costco membership). Let’s examine the fine print on the card website to address the question of what counts for a travel bonus: “3 percent back on eligible travel purchases worldwide, including airfare, hotels, car rentals, travel agencies, cruise lines and Costco Travel.”

That would suggest that tour companies such as Road Scholar, which organizes educational trips around the world, would qualify. But here’s the bad news: The Visa Supplier Locator says Road Scholar is classified as a “school,” not a travel services company. Road Scholar agrees.

“Our merchant code is educational, thus it’s possible that these folks would not be able to earn 3 percent for traveling with us,” Road Scholar spokeswoman Rachel Valenzuela-Castillo said in an email.

Most other tour companies seem to come up as “travel services,” including Tauck, Cosmos and Trafalgar. Those would likely qualify as travel expenses and be eligible for bonus rewards on cards that give extra points for travel. Luxury tour operator Abercrombie & Kent, however, is classified as an “association/organization,” so expenses there probably would not qualify.

Still, it’s worth trying to use a travel card with tour operators, especially since I know of no cards offering bonuses for “association/organization” or schools. Sometimes, you might not know whether a charge counts as a travel expense until your statement arrives weeks later.

See related: FAQs on Costco Citi Visa card

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