What is an eligible purchase on a credit card?

You have just been approved for a new credit card with an attractive sign-up bonus. In order to unlock those bonus points, you need to meet a minimum spend requirement by making ‘eligible purchases’. But what exactly counts as an eligible purchase?

In this guide, we look at the general definition of eligible purchases and how to check the requirements for your individual credit card.

What counts as eligible purchases on a credit card?

Eligible purchases usually include everyday transactions at places like the supermarket, petrol station, doctor’s office, chemist and restaurants. Other examples include spending money on the dry cleaner, public transport, coffee and clothes. However, the definition of an eligible purchase can vary between cards, banks and financial institutions.

What doesn’t count as an eligible purchase on a credit card?

For the purpose of reaching a minimum spend target on a credit card, there are a number of transactions that are generally deemed ineligible. These tend to include:

• Balance transfers
• BPAY transactions
• Cash advances
• Cash equivalent transactions
• Card fees (e.g. annual fee, late payment fee)
• Gambling or gaming spend
• Interest charges
• Loan repayments
• Refunded transactions
• Travellers’ cheques

Most credit cards also do not earn points on bills, insurance or at the Australian Tax Office. But, there are some workarounds, including using Pay.com.au for ATO payments.

How to check the definition of eligible purchases for your card

1. Go to Google, Bing or your favourite search engine.
2. Enter the name of your exact credit card in the search box.
3. Click on the bank’s page for your credit card.
4. Scroll down to the card’s terms and conditions (or similar).
5. Look for the words Eligible purchase (if you can’t find them, use Ctrl+F (Windows) or Command+F (Mac) to search).
6. Read the bank’s definition of ‘eligible purchases’ for your card.
7. Note that each bank and credit card can have different definitions of an eligible purchase.

Summing up

It is important to make sure that you understand which type of transactions will earn you points when using your credit card, and which ones count as eligible spend towards reaching a minimum spend target.

Most everyday transactions, like shopping, dining out or purchasing fuel, are counted as eligible purchases. But things like bank fees, charges and repayments usually aren’t.

You’ll want to check the exact definition for the credit card that you hold or are looking to apply for. That’s because the definition of an eligible transaction varies between different cards, banks and financial institutions.

Also read: Getting started with earning points on credit cards

Featured image: Clay Banks, Unsplash

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