I've seen a few responses scattered on the internet that attempt to answer this but they seem to disagree on the matter.

When dealing with cash-back credit cards, they offer different percentages for different categories like gas, groceries, dining, etc.

How do they know which category your purchases fall in? Do they guess based on the merchant? Does the merchant send them totals of each category in each transaction? I can't imagine that the credit card company sees individual items purchased.

(Secondary question but not necessary)In general do all credit cards get this information or is this something that only cash-back/rewards cards get?

1 Answer 1


Each merchant is assigned a category, and all the purchases through that merchant fall into that category. If a merchant qualifies for more than one category (e.g.: Costco & Costco Gas), then for different purchases the merchant will use different merchant ID's.

These codes are called "MCC codes", and the merchant fees are also decided based on the category assigned to the merchant (the same merchant with several codes will pay higher fees on some codes than the others).

You can see the purchase categories on your credit card purchases regardless of whether you get rewards or not, this information is usually available through your statement or on-line.

  • 5
    Indeed. So when I have a card that gives a 5% rebate at office supply stores, by buying say, a Home Depot gift card there, I still get that 5%. Maybe not worth it on small purchases, but for the $800 grill.... Commented Sep 17, 2011 at 0:05
  • That doesn't fall under a cash advance clause?
    – jldugger
    Commented Sep 17, 2011 at 14:42
  • @jldugger - no. I bought gift cards in my neighborhood Safeway several times for precisely that reason.
    – littleadv
    Commented Sep 17, 2011 at 18:02
  • Do you know if two different credit cards could consider the same merchant to fall under different categories? Do the card issuers themselves determine what the MCC is? For example I'm sometimes surprised that what I would consider to be a restaurant counted as a bar for cashback and wondered if a different credit card would have categorized it differently.
    – Griftoni
    Commented Nov 24, 2022 at 16:11
  • 1
    @Griftoni MCCs are typically assigned by processors, not issuers. However, MCCs themselves are pretty detailed and there are multiple codes that can describe similar establishments. The issuers may treat these MCCs differently. E.g.: MCC_A and MCC_B are "restaurant" and "diner". Your issuer X gives 5% cashback for restaurants, and issuer Y gives 4% cashback for food. You may end up getting both cashbacks for both, but you may also end up with X only giving cashback for MCC_A, but not MCC_B.
    – littleadv
    Commented Nov 24, 2022 at 19:19

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