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Retailers receive one code, even if they may qualify for another. For example, Wal-Mart is coded as a superstore only. Even though it sells groceries, it is not coded as a supermarket.
Let's see how this affects your American Express card, which sounds like the Blue Cash Preferred credit card by the way you described it. The American Express Blue Cash Everyday Card gives 3 percent back on supermarkets. But the small print defines that as stand-alone supermarkets, not superstores such as the aforementioned Wal-Mart or warehouse clubs like Costco. The card also offers 2 percent back on gas stations. But again, that doesn't apply to gas sold at a superstore, supermarket or warehouse club.
American Express isn't the only issuer that makes this distinction. The Citi ThankYou Preferred Card offers two rewards points for every dollar spent on dining and entertainment. But the terms and conditions caution that the coding determines what counts:
"We do not determine how merchants or establishments are classified. Merchants who accept Visa/MasterCard credit cards are assigned a merchant code based on the merchant's primary line of business and the kinds of products and services they sell. Sometimes a merchant will sell a particular item that appears to fit within the stated qualifying category, but that merchant may not have a merchant code that fits within that category."
Similarly, the BankAmericard Cash Rewards credit card stipulates that the 2 percent cash back is awarded to purchases made only at merchants coded as grocery stores, supermarkets, dairy product stores and bakeries; candy, nut or confection stores; freezer or meat lockers, and miscellaneous food stores. Discount stores or wholesale clubs are excluded.
Credit cards that feature rotating bonus categories every quarter such as the Discover It card and the Chase Freedom card also are limited by merchant coding.
So, it's not just American Express. It's a function of coding. And it's a key factor to think about before you sign up for a rewards credit card. Make sure to read the fine print.
For example, if you get gas mostly at Costco, maybe it's worth getting the TrueEarnings Card from Costco and American Express that gives 3 percent back on Costco gas and at all other U.S. gas stations instead of another card that excludes warehouse clubs.
Or, maybe it's worth getting a card that gives a flat rewards rate on every purchase, such as Capital One's Quicksilver Cash Rewards Credit Card that offers 1.5 percent back on all spending.
Check out Bankrate's survey of cash-back cards for help. Good luck!
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To ask a question of the Credit Card Adviser, go to the "Ask the Experts" page and select "Credit Cards." Read more columns by the Credit Card Adviser. Follow Janna Herron on Twitter.