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How Credit Card Issuers Define ‘Travel’

Nerd Wallet

What’s a ‘tourist attraction,’ anyway?
On their own, these terms aren’t especially helpful. “Commuter transportation” sounds like it could be anything that gets you to work. And “tourist attractions” is about as vague as you can get.

These categories actually correspond to merchant category codes. An MCC is a four-digit number that describes a merchant’s type of business. The payment networks, like Visa and Mastercard, use these standardized codes to set the fees that merchants pay to accept cards. When you make a purchase, the payment network communicates the merchant’s MCC to your issuer, and it generally shows up on your credit card statement with the other transaction information. Many issuers use these codes to reward cardholders for spending in certain categories — say, restaurants or gas stations.

A merchant’s bank decides with the merchant how its business should be classified. Codes depend solely on the merchant, not its location or what you’re buying. If you eat at a restaurant in a hotel, for example, your issuer will probably consider your tab restaurant spending — not hotel spending. And if you buy a souvenir T-shirt at that restaurant, it will count as a restaurant purchase just like your meal.

In the early days of credit cards, payment networks categorized purchases using the federal government’s Standard Industrial Classification codes, says Chuck Fillinger, a senior associate at The Strawhecker Group, a banking consulting firm. As more merchants started accepting credit cards, categories expanded beyond the old government-based system and became more specific. There are now hundreds of MCCs, Fillinger says. As new card-accepting merchants emerge, more categories will likely be added.

“Travel is probably the most confusing, with a variety of MCCs, as there are so many different aspects. You have trains, buses, airlines, hotels and Uber and Lyft,” Fillinger says.

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