The Nugget
- Understanding what counts as a grocery purchase is vital for maximizing rewards on your credit cards. It's the merchant category code (MCC) that defines eligibility, not the actual products bought.
Make it stick
- 🏪 Grocery purchases generally include stores designated with grocery store category codes like supermarkets, bakeries, and dairy stores.
- ❌ Convenience stores, discount stores, and drugstores do not usually qualify as grocery stores for rewards.
- 💳 To maximize rewards, shop at businesses that clearly fall under the grocery MCC and avoid those with multiple codes if varying rewards apply.
- 📅 Activate rotating bonus categories on your credit cards each quarter to ensure you’re using the right cards for grocery spending.
Key insights
How Merchant Category Codes Work
- Merchant Category Codes (MCCs) classify businesses; the correct MCC determines if a purchase counts as grocery.
- Businesses may have multiple MCCs, which can impact whether specific purchases are eligible for grocery rewards.
What Counts as Grocery Purchases
- Chain supermarkets and independent grocery stores.
- Bakeries, dairy product stores, and meat lockers.
- Grocery delivery services when purchased from qualifying stores.
What Doesn't Count as Grocery Purchases
- Convenience stores selling groceries.
- Discount and superstores, including warehouse clubs.
- Drugstores with food items are typically excluded.
- Pharmacy and gas station purchases from grocery store brands generally don’t qualify.
Tips to Maximize Grocery Store Rewards
- Choose cards that offer customized rewards based on your shopping habits (e.g., superstore cash back).
- Consider store-branded credit cards which can provide higher cash back percentages.
- Monitor and activate bonus categories each quarter for maximum earnings with rotating offers.
Key quotes
- "The merchant, not the merchandise, determines what is classified as a grocery purchase."
- "Understanding your credit card issuer's definition of a grocery purchase is crucial."
- "For a grocery purchase to be eligible for grocery-category credit card rewards, the business must be classified as a grocery store."
- "Stores may have multiple MCCs; a supermarket with a pharmacy may have distinct codes for each."
- "Used strategically, rewards cards can help you stretch your grocery budget or earn rewards."
This summary contains AI-generated information and may be misleading or incorrect.