Understanding Merchant Category Codes (MCCs) and Their Impact on Credit Card Rewards

If you have a rewards credit card, you’re probably familiar with the different spending categories that earn you the most cashback, miles, or reward points.

But how does your credit card “know” which purchases qualify for these bonuses? The answer lies in Merchant Category Codes (MCCs).

Understanding MCCs is key to maximising your rewards, whether you’re earning cashback on dining, miles on travel, or points for everyday expenses. Here’s how MCCs work, how they affect your rewards, and what you need to know to make the most of your credit card benefits.

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Merchant Category Codes (MCCs) are four-digit numbers assigned to businesses based on the products they sell or services they provide. These codes help payment networks categorise transactions, which in turn determines how your credit card rewards are applied: 

• Each business receives an MCC when it sets up a credit card payment system. This code is assigned by payment networks such as Visa, Mastercard, and American Express.

• The MCC typically reflects the business’s primary product or service, even if the merchant offers multiple types of goods or services.

• MCCs are generally standardised, meaning a merchant classified as a restaurant will have the same code across different card networks.

• Since credit card issuers use MCCs to determine whether a transaction qualifies for bonus rewards, knowing how these codes work can help you make more strategic spending decisions.

Whenever you make a purchase with your credit card, the transaction is automatically assigned a merchant category code based on the type of business. This MCC is then reported to your credit card issuer, which determines whether your purchase qualifies for additional cashback, miles, or rewards points.

For example, if you purchase electronics online, the MCC may be categorised under “online marketplaces” or “electronic goods retailers,” depending on where you shopped. If your credit card offers higher cashback for online spending, you could earn more rewards. However, if you buy the same item at a physical store, the MCC may classify it as a standard retail purchase, which might not qualify for the same level of rewards.

If you use a flat-rate rewards credit card that earns the same percentage on every purchase, MCCs might not make much of a difference. But if you have a cashback or miles card that offers bonus rewards for specific spending categories — such as groceries, dining, or online shopping — MCCs become highly relevant.

For instance, a supermarket typically falls under the MCC for “grocery stores,” meaning your grocery credit card will reward you for shopping there. However, if you buy a carton of milk at a convenience store, which may have an MCC under “convenience retailers,” you might not earn those bonus rewards.

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Unlike in some countries where there are online tools to check MCCs, Singapore does not have a centralised database for consumers to look up merchant category codes in advance. However, banks often provide PDF lists detailing what MCCs qualify for bonus rewards under specific credit cards. Checking these documents can give you a rough idea of where your purchase might fall.

If you want to be certain, you can try contacting the business directly and asking which MCC they are registered under. Some merchants may be able to provide this information, though not all frontline staff will be familiar with the details.

In reality, most cardholders in Singapore figure out MCCs by working backwards — making a purchase and then checking how many reward points, cashback, or miles they received. If the transaction doesn’t earn the expected bonus rewards, it likely falls under a different MCC than anticipated.

1. The MCC may not reflect what the store sells

Just because a store that sells groceries or dining-related items doesn’t guarantee that its MCC aligns with those categories. For instance, a shop that appears to be a bakery could still be classified under a general retail MCC if it originally started as a convenience store. Even if it expands its offerings, the original MCC may remain unchanged — affecting whether your credit card issuer processes the purchase under a bonus-eligible category.

2. Different locations or sections may have varying MCCs

A business with multiple outlets or distinct sections within the same store can have different MCCs depending on where and how you make your purchase. For example, a department store might be classified under general retail at one location, while another branch with a dedicated grocery section could have an MCC that qualifies for supermarket rewards.

Additionally, larger retailers often assign separate MCCs for specific departments — such as a pharmacy or electronics counter within a hypermarket. This means that a purchase made at one section may earn bonus rewards, while another transaction at a different counter might not.

3. MCC classifications may vary across payment networks

Merchant category codes are assigned by payment networks like Visa, Mastercard, and American Express, but these classifications may differ slightly across networks. This can affect the rewards you earn on certain purchases, depending on how the transaction is processed.

For example, you might expect to earn cashback on dining when you use your credit card at a hotel restaurant. However, if the transaction is categorised under a hotel or travel MCC rather than dining, your card issuer may treat it differently — possibly earning you miles instead of cashback.

These inconsistencies highlight why it's essential to check your past transactions and understand how your credit card issuer categorises spending. If maximising rewards is a priority, consider testing small purchases first or contacting your bank for clarification on MCC classifications.

4. MCC classifications for travel expenses can vary between card issuers

Most travel rewards credit cards in Singapore typically cover key expenses like flights, hotel stays, and car rentals. However, travel-related merchant category codes (MCCs) go beyond these essentials, covering bus and train rides, ferry services, taxis, tolls, and even campgrounds.

The challenge? Not all issuers define “travel” the same way. While some banks may categorise expenses like ERP charges or ride-hailing services as travel-related, others may not. This can impact the type of rewards you earn on your spending.

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If your store is correctly categorised but you're still not earning the expected cashback, miles, or rewards points, several factors could be at play:

• You've reached the rewards cap. Many credit cards have a maximum limit on bonus rewards for specific spending categories within a quarter or year. Once you exceed this cap, subsequent purchases may only earn the base rate.

• Your transaction was processed through an unqualified system. Some credit card issuers exclude purchases made via third-party payment platforms, online marketplaces, or mobile payment systems from earning bonus rewards. If your purchase was processed through a payment aggregator like PayPal, FavePay, or ShopeePay, it may not be eligible.

If none of these situations apply, it’s best to contact your credit card issuer to clarify the discrepancy. They can verify whether your transaction was correctly categorised and explain why you didn’t receive the expected rewards.

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