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Some credit cards (e.g. Bank of America) offer cardholders the option to earn cash back at a higher rate on online shopping purchases. (More specifically: you get to choose one 3% cash back category from a list of options, one of which is "online purchases"; everything else earns 1% cash back.)

It's not entirely clear to me what counts as an "online purchase". Let's say I am signing my kid up for a summer camp. The online registration form offers various payment options: I can pay by entering my credit card information directly, or I can use either PayPal or Google Pay (either of which will, in turn, ask me to select a method of payment). Does this count as an "online purchase"? Does it matter which payment method I use?

One possibility is that any payments charged to the appropriate card via PayPal or Google Pay automatically count as an "online purchase". Another possibility is that it's the identity of the merchant that matters, not the intermediary. I have been unable to find any information online that clarifies this.

(Unfortunately "try it and find out" doesn't seem to work, as the monthly rewards statement does not give an itemized breakdown of which purchases earn 3% and which earn 1%.)

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  • Most other categories are self-selecting. Your purchase would count as a restaurant purchase if the place you paid reports themselves a restaurant. In your example, I suspect it would be an online purchase if the summer camp reports having processed an on-line registration, rather than running your card during, e.g. an office visit.
    – chepner
    Jun 3, 2021 at 18:16
  • There's usually fine print on the offer that goes with this.
    – pboss3010
    Jun 3, 2021 at 18:29

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The Bank of America category is actually "online shopping", which is a little less broad than "online purchases" in my experience. The details are listed here. In general I have found this category to be quite inclusive; pretty much anything that could be called online shopping has ended up getting the bonus. However, the website above does list some important exceptions "such as Doctors and Hospitals, Government Services and Taxes, Insurance, Membership Organizations, Schools, Utilities and other non-retail services." I'm not sure about PayPal or Google Pay purchases; I suspect you are correct that the original merchant is what matters.

Also, if you look online you should be able to figure out what is getting 3%. Once you log in and go to the correct card, hit the 'Rewards' tab. It should show a table of all your recent cleared transactions. Next to the purchase you should see a blue 'BONUS' link which shows the base 1% rewards, then "CATEGORY BONUS: for online shopping purchase" with the extra 2%.

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Only direct communication with the credit card provider can answer this for sure. Get it in writing or record the call if you're serious.

How they work:

Nearly all rewards cards decide to honor our not honor a reward based on MCC code numbers (Merchant Category Codes). Every credit card "terminal" is assigned a code between 0000 and 9999 (from a list that is co-maintained by the IRS and Visa/Mastercard) when it is first set up and that code seldom changes. (It doesn't matter what you buy)

"Rewards card" credit card programs create groups of MCC Code numbers that they usually call categories. 

MCC# 4900 is utilities for example. MCC# 0742 is veterinatian services.

US Bank's CashPlus has a user selectable 5% category called "Utilities" that is just MCC code 4900.

Amalgamated Bank of Chicago has a quarterly category called "Health Services" category that includes 0742 as well as the codes used by most hospitals and doctor's offices.

BBVA's ClearPoints Rewards card offers a category called "Retail" which is pretty choice. It's almost all brick and mortar stores. But Grocery, Restaurats, Autoparts&service & gas are excluded.

It's rare but not unheard of for a credit-card-program-defined category to include a specific named store, like walmart.com online. I've even seen some that honor all transactions processed through apple-pay or google-pay. But I've never seen one that subtracts a specific store from otherwise qualifying by its MCC code.

I don't have a BofA card, but you should call your service rep and ask them to "specifically list each of the four digit numerical MCC category code numbers that apply" to the categories you're curious about. Transfer to another rep until you find one who understands what you're asking.

the Visa Supplier locator will let you look up MCC numbers of physical stores. https://www.visa.com/supplierlocator/index.jsp

The USDA for some reason is hosting a big list of the codes and their descriptions: https://www.dm.usda.gov/procurement/card/card_x/mcc.pdf

Notice the description text is often listed verbatim in the credit card company's category descriptions.

To sum it up:

It's misleading to think that "online purchases" has anything to do with "anything paid for online".
"Online Purchases" is merely what BofA calls a group of qualifiers (typically mcc codes). The way you pay (online or in store) is kind of immaterial.

Source: This is my primary sport. I earn points every month on over a dozen cards, with about 3 dozen rewards cards open and available. All paid off weekly. I earn between $200-300 in points monthly.

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  • Does e.g. Target have a separate MCC for online vs. in-store purchases? Does Red Robin?
    – stannius
    Jun 7, 2021 at 17:23
  • almost certainly yes. it's not "target's" mcc. It's the mcc of register number 4 at 1234 lewis road, cambridge mass, 12345. every credit card "terminal" has its own mcc. the register in the pharmacy of some walmarts for example, rings up with an RX MCC. So if you have a good reward rate for RX, you can bring your cart to the pharmacy to get the higher rewards if they're willing to check you out there. ditto for the auto service department. terminals for online shopping are almost always virtual, but they are separate distict "terminals" nontheless.
    – Billy left SE for Codidact
    Jun 7, 2021 at 22:17

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