MCC: The Three Most Important Letters When Earning Air Miles (or Cashback)

What merchants fall under dining? Or travel? The MCC will tell you – and it's the determining factor in how many rewards you're earning on your credit card.

Opinions expressed reflect the view of the writer (this is his story).

Whether you play the miles game or the cashback game, here’s three little letters you absolutely need to know: MCC.

Table of contents

• What is an MCC?
• Why are MCCs important?
• MCC complications
• How to find MCCs more easily?
• How to appeal for MCCs?
• Conclusion

What is an MCC?

MCC stands for “merchant category code”, and it’s the all-important determinant of any miles or cashback strategy. 

This four-digit number is used to classify the nature of a particular merchant’s business. For example, a restaurant may use MCC 5812 (Eating places and restaurants), and a hairdresser may use MCC 7230 (Barber and Beauty shops).

Why are MCCs important?

Why should you care about the MCC? Because banks use it to categorise transactions for the purpose of awarding bonus miles and cashback on specialised spending cards. 

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A specialised spending card is one that earns a very high return on certain categories of spending, and a low return otherwise. Used properly, they can be a way of turbocharging your mileage accumulation.

An example is the Citi Rewards card, which earns 10X points (4 miles per dollar) on online shopping, as well as department stores and merchants which sell shoes, bags or clothes. It earns 1X points (0.4 miles per dollar) on everything else. 

How does Citibank know when to award the bonus points? It looks at the MCC of the transaction. If the MCC falls into any of the following categories...

… it knows to trigger the bonus points on the back end. 

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Or take the OCBC 365, which offers 5% cashback on dining worldwide and online food delivery, 6% on all petrol, 3% on groceries worldwide, transport, EV charging, streaming subscriptions, pharmacies, and utilities, and 0.3% everywhere else. 

It's further split into two tiers of minimum spending: S$800 per month and S$1,600 per month. The lower S$800 tier will net you a lower cashback cap of S$80 per calendar month whereas the higher S$1,600 tier will net you a higher cashback cap of S$160 per calendar month.

So how much cashback you earn that month will depend on your expenditure threshold – giving you the flexibility of choosing whether to spend or save more in any particular month.

When someone uses this card at a restaurant, OCBC sees the MCC of the transaction and knows to award 5% cashback instead of the usual 0.25%.

The problem with MCCs

Suppose you dine at a hotel. You pay the bill with your OCBC 365 card expecting to earn 6% cashback, but at the end of the month you see only 0.3%! You call the bank and learn that the restaurant transaction coded as a hotel spend, instead of a dining transaction. 

These “grey area” MCCs are one of the biggest pitfalls when it comes to bonus category spending.

Does a Delifrance Express located in NTUC code as a grocery store, or as a restaurant? Does a deli in a Shell station code as a cafe, or a petrol station? Does an electronics store in the airport code as electronics spend, or duty-free spend? 

This wouldn’t be that big an issue if you could simply google “What is the MCC of merchant X” before spending. But MCCs are opaque, and the only way to learn them is after the fact (try asking a cashier what the shop’s MCC is and prepare to be met with a blank stare). It’s only after the transaction has posted to your credit card that you can call the bank and enquire how it coded. 

It doesn’t help that bonus miles and cashback cards are high risk, high return propositions.

What do I mean? Suppose I have a UOB Lady’s card and select dining as my 10X category. I go to a Delifrance Express in an NTUC supermarket and buy a croissant. If I use my UOB Lady’s card to pay, I’ll either get:

• 4 mpd, if Delifrance Express codes as a cafe/restaurant
• 0.4 mpd, if Delifrance Express codes as a grocery store

In the former case, I’m much better off than using a general spending card like the UOB PRVI Miles, which earns 1.4 mpd everywhere. But in the latter, I’ve lost out by not using a general spending card. 

Fortunately, most cases are more clear cut. Crystal Jade is obviously a restaurant. NTUC is obviously a grocery store. G2000 is obviously a clothing store. In these situations, you should absolutely break out the bonus category credit cards. 

In ambiguous cases, however, I’d recommend either testing a small amount first, referring to this crowdsourced spreadsheet where people report MCCs, or using a general spending card to be safe. 

Is there an easier way to find MCCs?

If you don’t fancy calling the bank and going item by item to figure out MCCs, there is an easier way, at least for DBS customers. DBS has been investing heavily in artificial intelligence, and one of the fruits of that investment is the DBS Virtual Assistant. 

Step 1: Type “credit card transaction inquiry”, then “view my transactions”. You’ll see a list of your cards.

Step 2: Select one, and “view transaction history”.

Step 3: You have the choice of seeing billed or unbilled transactions. Pick either one. 

The screen should now populate with your transactions and their merchant category. 

There’s one final piece of the puzzle missing here. We have the description of the merchant category, but not the code. Go to this Citibank MCC listing and do a control-F to find the corresponding MCC. For example, by searching for “Janitorial”, I can see that my Helpling SG transaction codes as MCC 7349. 

Can I appeal a non-bonused transaction?

Of course you can, but there’s no guarantee you’ll get anything out of it. To be fair, banks can be sympathetic to customer complaints about MCCs, perhaps realising how opaque the whole situation is.

Based on reports on places like Hardwarezone, it is possible to request the bank review your case and credit the bonus points/cashback out of goodwill. 

Conclusion

Given the complexity involved in decoding MCCs, is it still worth using specialised spending cards? 

In my opinion, absolutely. Someone earning 4 mpd on his/her spending will certainly accumulate miles faster than someone else earning 1.4 mpd everywhere, even if there are some missteps along the way. 

So whether you’re collecting miles or cashback, know your MCCs in order to optimise the rewards you earn!

Be sure to compare and apply for the best air miles cards in the market via SingSaver to get the best welcome deals and level up your miles game.