Dear Your Business Credit,
How can I find the merchant category code of any business before I actually do the transaction? The tellers donât even have an idea of what I am talking about in most cases. Thanks for your help! â Adi
I can see why youâre frustrated. Fortunately, you donât have to rely on company representatives to find merchant category codes, or MCCs.
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For the benefit of readers who arenât familiar, a merchant category code (MCC) is a four-digit number the major credit card networks (Visa, Discover, American Express and Mastercard) assign to every business that applies to accept credit cards. The number corresponds to the type of business or service the company offers.
Credit card networks use MCCs to categorize and track purchases. When a purchase is added to your statement, the category assigned to it, such as âbuilding materialsâ or âadvertising servicesâ is tied to the merchant category code. Major airlines and hotels each have their own MCC code.
MCCs can vary by processor, but there are some common trends. Here are some common merchant categories, provided by Citi:
So, how do you look up the MCCs of a particular business? Each card network has its own list, though many codes are shared among the networks. As a result, a merchant may have a different code with Visa than with Mastercard, for instance.
Other online resources beyond the guide provided by Citi include the Visa Supplier Locator Tool, the Visa Merchant Data Standards Manual and the Quick Reference Booklet â Merchant Edition for Mastercard.
If you make purchases for your business, merchant category codes can also help you maximize your credit card rewards. The rewards programs for certain cards will give you points for purchases that are in certain coding categories. Paying attention to how your card is categorizing a purchase can help you get more points, especially if you patronize a particular merchant regularly.
change your business’s merchant category code.
Becoming familiar with MCC codes is important for both business owners and consumers. If you run a business where you are paid by credit card, your MCCÂ will determine how much it costs you to process credit cards. Businesses with âhigh-riskâ MCCs generally pay higher fees and often need to shop around for a merchant processing contract designed for those in this category.
The MCCs on your statements also come into play when it is time to file your taxes. They help determine whether the bank that transfers the money from credit card transactions to your bank account will need to report them to you on Form 1099-MISC. For more information, see the IRSâs Payment Card Transactions FAQs.
prevent certain types of purchases. For instance, a company that issues corporate cards may decide to restrict employees from staying in pricey hotels during business travel by arranging with the network to only cover lodgings with specific MCCs.
Knowing MCCs can also help cardholders maximize rewards. For example, if your card gives you rewards for restaurant spending, you might want to pay attention to whether a fast-food restaurant attached to a gas station counts as a restaurant or âfuelâ and only use that card at the eatery if the gas station location counts as a restaurant, for instance.
When in doubt, you can always ask the merchant if they know the code or make a small purchase to find out how it is categorized on your card. The employees may not be familiar with the MCC, but the owner of the business probably will be more aware.
That said, you probably wonât be able to make huge inroads in racking up rewards points this way, but even a few extra points here and there can add up over time. Good luck!