If I have a 1% cash back card and spend $100 plus $6 sales tax, do I get $1 cash back or $1.06 cash back?

  • If that 1% card isn't just for the sake of example, you should go get a better one - 1% is a terrible rate in today's market. – user2357112 supports Monica Jul 17 at 0:46
  • @user2357112supportsMonica It's an example, but thanks – user99899 Jul 17 at 3:52

Generally, you will get cash back for the entire amount (so $1.06 in your case).

The credit card issuer usually doesn't event know the tax amount, since it is charged as a single transaction.

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    I’d add, it also includes tips, if that’s charged in the total. – JTP - Apologise to Monica Jul 16 at 15:21
  • I vaguely remember something about certain things being represented separately, even if it is a single charge. However, from the CC issuer's perspective, they don't care what each part is, because the 2.5% (or whatever) they collect applies to every part of the charge, and that's where your cash back comes from. – chepner Jul 16 at 15:43
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    @JTP-ApologisetoMonica That reminds me of a "discussion" I had with a friend who was a very good tipper (at least 25%) as a way to get more "miles". He refused to believe that he was actually paying more overall. – D Stanley Jul 16 at 16:17
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    D - You can't fix "stupid". There are many variations on this, including those who have a mortgage "for the deduction", or those who brag about getting a $3000 tax refund, when they owe, you guessed it, about $3000 on their cards while paying the minimum balance. Once the math is disrespected, I'm inclined to walk away. – JTP - Apologise to Monica Jul 16 at 17:08
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    To expand: the card issuer might get data indicating the amount of tax charged on the transaction if the merchant sends Level 2 or Level 3 data when completing the charge. As a consumer, there's pretty much no way to know whether that is happening or if your card issuer does anything with the data — you'll never have access to it. It's irrelevant though, since cash back is (almost) always calculated based on the total purchase amount. – josh3736 Jul 17 at 0:57

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