The Shrinking Rewards Landscape for Education Spending: How to Still Earn Miles on School Fees and Beyond
The cost of raising a child, from preschool to university, is a significant financial undertaking for most families. But while everyday spending often unlocks valuable credit card rewards, education expenses are increasingly excluded. Once a reliable avenue for earning miles, points, or cashback, paying for school is now often treated like any other non-reward earning transaction. This shift, driven by bank profitability and Merchant Category Code (MCC) classifications, is forcing parents to get creative – and it’s a trend that’s likely to accelerate.
Understanding the Education MCC Blacklist
Banks don’t arbitrarily decide to exclude education spending. They rely on the Merchant Category Code (MCC) system to categorize transactions. Transactions falling under MCCs 8211 (Schools, Elementary and Secondary), 8220 (Colleges, Universities), 8241 (Correspondence Schools), 8244 (Business Schools), 8249 (Trade & Vocational Schools), and 8299 (Education Services Not Elsewhere Classified) are frequently ineligible for rewards. Even payments to Singapore Management University (SMU) often code as the excluded MCC 9399, further complicating matters.
Why the crackdown? Merchants using these MCCs typically pay lower processing fees, reducing banks’ revenue. Excluding these transactions allows banks to maintain profitability on their rewards programs. The trend has been steadily unfolding: DBS (2017), Citibank (2018), UOB (2019), Standard Chartered (2020), Bank of China (2020), HSBC (2020), and even American Express (2023, with exceptions) have all tightened their policies.
The Remaining Options: Cards That Still Reward Education
Despite the shrinking pool, some cards still offer rewards on education spending. Maybank and select American Express and UOB cards remain viable options, though often with caveats. The Chocolate Visa Debit Card stands out for its accessibility, offering 1 Max Mile per S$1 spent on education, capped at S$1,000 per month. Crucially, it has no annual fee or income requirement and doesn’t penalize education spending as a bill payment.
Maybank’s offerings require more nuance. The Horizon Visa Signature and Manchester United Card award a reduced 0.16 mpd on “Selected Categories” including education, but offer a significantly boosted 2.8 mpd on foreign currency transactions (with a minimum S$800 monthly spend). The Maybank XL Rewards Card provides 4 mpd on education transactions charged in foreign currency, subject to a S$500 minimum and S$1,000 monthly cap.
Beyond Direct Rewards: Leveraging Bill Payment Platforms
For those willing to pay a fee, bill payment platforms like CardUp, Citi PayAll, and SC EasyBill can unlock rewards on otherwise ineligible transactions. However, the cost-benefit analysis is crucial. A cardholder with Priority Banking status at Standard Chartered, for example, could pay a 1.9% fee via SC EasyBill and effectively purchase miles at 0.95 cents per mile. Whether this is worthwhile depends on your individual valuation of miles.
The Rise of “Education-Adjacent” Spending and MCC Loopholes
Savvy parents are finding opportunities in “education-adjacent” spending. Childcare services (MCC 8351), music lessons (MCC 5733), and sports activities (MCC 5941) often fall outside the explicit education exclusions. Cards like the Amaze + Citi Rewards, DBS Woman’s World Card, UOB Preferred Platinum Visa, and UOB Visa Signature can earn up to 4 mpd on these categories, subject to monthly spending caps. However, be aware that some enrichment centers may incorrectly code as education MCCs (like Marsden Aquatics and Happy Fish Swim School coding as 8299), so verification is key.
Tools like HeyMax and the DBS “block card” feature can help determine a merchant’s MCC before making a purchase.
The BNPL Workaround: A Growing Trend
Perhaps the most intriguing workaround involves Buy Now, Pay Later (BNPL) providers like Atome. Atome codes as MCC 5999, a rewards-friendly category, and partners with a growing list of schools and enrichment providers. Using Atome effectively re-categorizes the transaction, allowing you to earn rewards on spending that would otherwise be ineligible. However, remember to manually trigger payments a few days before the due date to avoid recurring payment coding issues.
Looking Ahead: The Future of Education Rewards
The trend of banks excluding education spending is unlikely to reverse. As margins tighten and competition intensifies, banks will continue to prioritize profitability. We can expect to see even more granular exclusions and a greater reliance on MCC classifications. The future of earning rewards on education expenses will likely involve increasingly complex strategies, leveraging loopholes, and embracing alternative payment methods like BNPL. The key for consumers will be staying informed, proactively verifying MCCs, and adapting to the evolving rewards landscape.
What strategies are you using to maximize rewards on education spending? Share your tips and experiences in the comments below!
