Bonus Points On Your Credit Card…Maybe

Wow, you’d think that after 15 years and almost 700 of our radio segments we’d have talked about everything by now. Not true – not even close – never in the world of money and finance!

Pop quiz: Is hiring a company for a $20,000 job to finish your basement considered a home improvement? Nope – probably not.

Is buying gum and hand cream at Lowe’s considered a home improvement purchase? Yup.

See – and you thought you knew!

On Monday, the Royal Bank Westjet MasterCard (MC) started a double points (Westjet dollars) promotion on “eligible” electronics and home improvement purchases. Just after I bought $200 of treated lumber – it never fails…

Almost every card will have these promotions from time to time. But it’s buyer beware because the key word is “eligible” purchases. The hundreds of thousands of retailers and companies who accept credit cards all have a merchant category code (MCC) that identifies their primary type of business. My company is consulting – so it’s coded as professional services. That’s the same for accountants, dentists and the likes. So if you buy some lumber from your lawyer, or an “I love George Wednesday mornings” T-shirt, it’s still a charge in the category of professional services and not home improvements or clothing.

It is not what you buy that matters. It’s a charge in the right category that determines whether you get your bonus points for any promotion. A contractor won’t be coded correctly so your $20,000 charge won’t get you bonus points. But Home Depot, Lowe’s, Rona, Home Hardware, General Paint, or the likes are always coded home improvements. So whether you buy gum, lumber, paint, or appliances there, you’ll get the points.

Here is the full disclosure on the bonus point offer. It took me almost half an hour and comes from three different places. Thank you Royal for the details, but would you look a half hour to find these when your card offers them?

-Your bonus points won’t show up on your statement for 6 to 8 weeks. By that time, any promotion is probably over and you won’t know if you actually got them.

-You can’t get the MCC code in advance to know if you’re buying the right stuff from the right merchant with the right code.

If you stick to the “obvious” retailers, you’re safe – but never sure. Here’s the disclosure. It’s the same for every points promotion but I bet you’ve never heard of seen it:

Home Improvement Purchase means a net purchase made at a merchant that is classified, by such merchant, as hardware stores, home supply warehouse stores, building materials, hardware equipment and supplies, plumbing and heating equipment, lawn and garden supplies, paints and varnishes, contractors and other home improvement supplies under MCCs 0780, 1520, 1711, 1731, 1740, 1750, 1761, 1771, 1799, 5072, 5074, 5193, 5198, 5199, 5200, 5211, 5231, 5251, 5261, 5996 and 7692.

Costco is considered a discount club with MCC5300 –Walmart is typically MCC5310 (discount store) or MCC5311 (department store) but they may also have a code set up under MCC5541 (groceries) – but that’s unlikely. So no bonus points there for any promotion from anyone – ever.

You could:

-Call your card issuer and ask for the MCC code for a specific retailer – but I doubt you’d get it.

-Check your old statements in case they’ve had the same promotion in the past where you can see what qualified.

-If you get an annual summary of charges (not with Royal Westjet) that will give you the spending under specific categories and you’ll be sure those stores qualify

Or do what most everyone does: Get excited about the promotion and charge away and hope you might get the points in the MCC code crap shoot.

Lastly, if any bonus offer ever has you buying from a more expensive retailer just to get the points, you’re tripping over dime to pick up a penny. You REALLY need to read the “what are your points really worth” on page 139 of the Money Tools book.

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