What Is a Bonus Category (and How Does It Work)?
This guide explains what a bonus category is, the types, and the catch that trips people up.
What a bonus category is
A bonus category is a type of spending on which a card pays more than its base rate. A card might earn its base 1x on everything, but 3x on dining or 5 percent on groceries, those elevated areas are the bonus categories. They are the main way rewards cards let you earn more on the spending you do most, the focus of which category earns the most.
Fixed versus rotating, and caps
Bonus categories come in two forms. Fixed categories earn the elevated rate year-round, so a dining card always pays extra on dining. Rotating categories change each quarter and usually must be activated. Either type often has a spending cap, a limit on how much earns the bonus each quarter or year, past which you drop to the base rate. Knowing your caps prevents a surprise.
The catch: merchant coding
The twist is that a bonus is triggered by the merchant’s category code, not by what you buy. So groceries bought at a store coded as a superstore, or a meal at a restaurant inside a hotel, can miss the bonus, which is exactly why a purchase sometimes does not earn a bonus. Learning the codes of the places you shop most is how you reliably capture your bonus categories.
- A bonus category earns an elevated rate above the base rate.
- Common ones are dining, groceries, gas, and travel.
- Bonus categories can be fixed or rotate each quarter.
- They often have a spending cap.
- They are triggered by the merchant’s category code.
Frequently asked questions
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