Ever wonder why you might earn 5% credit card cashback in the UAE when dining out, but only 0.3% on government transactions like paying a traffic fine?

The answer lies in Merchant Category Codes (MCCs) and understanding them is the key to maximising credit card cashback in the UAE.

What Are Merchant Category Codes (MCCs)?

MCCs are four-digit codes assigned by card networks like Visa, Mastercard, or Amex to classify the type of business you’re paying. Your bank uses these codes to decide your cashback rates in the UAE or how many credit card reward points UAE you’ll earn.

For example:

• 0001 – Grocery Stores / Supermarkets (think of cards marketed as supermarket cashback credit cards UAE)
  
  
• 0002 – Service Stations (fuel cashback credit cards UAE)
  
  
• 0003 – Government Services (government transaction cashback rates UAE)
  
  

When you swipe, tap, or pay online, the bank sees the MCC first, not the exact products you bought. 

Why Government and Utility Payments Earn Less

Some categories like government transactions in the UAE, fuel, utilities, or cashback on school fees UAE have capped/regulated interchange fees. These are considered essential services, and regulators or card networks keep fees low so merchants don’t pass high costs onto you. Since these purchases are unavoidable even a 1% increase in costs means thousands of dirhams extra in day to day costs.

Because the interchange fee is lower, banks earn less on these payments, and offer lower cashback, sometimes as low as 0.3% cashback on utility bills UAE, even on the best cashback credit cards in the UAE you won’t get high cashback on government spending.

Why Dining, Travel, and Online Shopping Earn More

Categories like travel, dining, and online shopping cashback UAE are non-essential services and carry higher interchange fees, meaning banks make more on these transactions. As a result, they can afford to give you higher cashback rates in the UAE. Some credit cards offer extra perks like best credit cards with airport lounge access UAE.

If you spend heavily on restaurants, look for dining cashback credit cards UAE that specifically list restaurants in their bonus categories. Frequent travellers can opt for travel rewards credit cards UAE, which often include credit card reward categories UAE such as airlines, hotels, and foreign currency transactions.

Essential vs. Non-Essential Spending

Think of MCCs as your card’s internal sorting system:

• Essential categories (government, utilities, fuel) → low cashback
  
  
• Non-essential categories (dining, travel, retail) → high cashback
  
  

Some banks even cap rewards in high-earning categories (known as cashback caps and limits UAE), so if you’re comparing options, check the fine print when comparing cashback cards UAE.

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How to Maximise Credit Card Cashback in the UAE

1. Know your MCCs: Check your bank’s rewards table to see which MCCs get the most cashback.
   
   
2. Match your spend to the right card: For example, use supermarket cashback credit cards UAE for groceries and a fuel cashback credit card UAE for petrol purchases.
   
   
3. Optimise online: Many banks offer higher rates for online shopping cashback UAE, so pay via e-commerce gateways where possible.
   
   

Bottom line: The MCC your transaction falls under decides your reward rate, not the size of your purchase. If you want the best return, choose a card that rewards your biggest spending categories, whether that’s travel, dining, groceries, or fuel and you’ll always get the most from your credit card cashback in the UAE.

To give your business the best rewards, instead of limiting to just cashback, air miles, or hotel points, use Qashio and earn all on your business purchases. 

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