Are there any banks or similar services that let you divide your balance into enforceable sub-accounts, with each sub-account limited to only certain merchants or categories?
For example, I’d like to be able to tell the service “Set $200 aside for restaurants, $400 for groceries, $60 for video games, and whenever one of those categories reaches its limit, allow no further transactions in that category.”
Does such a thing exist?
Ask your bank, but the answer is probably no. There is no way your bank will know how to categorize a transaction. For example, how would your bank categorize a debit for Doctor’s Associates, Inc vs Doctor’s Associates LLC?
They do technically exist, but I’m not sure if the random consumer can get one. Business (at least large ones) can get them for their employees.
They do this so that they can set the exact limits you were talking about. For example, they can allow them $1000 a month for gas, $1000 for lodging, $5000 for meals (clients), etc.
However, an issue they can bump into is that some stores are categorized the way you’d expect them to be. For example, the customers that would have these limits expect my store to be a deli, but I think my merchant account is set up as grocery or retail so it counts towards the wrong category and I’ve had some of my customer’s cards get denied because of that once or twice over the years. It usually takes a few phone calls (from them, to corporate) to get it cleared up. Of course, if you’re doing this yourself, that shouldn’t matter.
How about just getting a handful of prepaid Visa cards? Put a sticker on each one for what you want to use it for and when your budget resets (or whatever you’re doing) reload them.
I know that’s more of a headache, but I don’t think you’re going to be able to do what you want to do, at least not easily and if you need something to limit your spending that might be the next best thing.
If you are asking about a personal credit card, I doubt it.
But if you would like to set up employee purchasing cards for your business, it can probably be arranged. I’ve worked at employers where, for example, certain employees got Amex cards that were only valid for T&E charges, Mastercards that were only good at office supply stores etc. Cards that excluded liquor stores and certain merchant categories where the employer had exclusive supply arrangements, etc. I don’t know how big a business you have to be to negotiate such an agreement.
They would simply go by the Merchant Categorty Code (MCC) assigned to the merchant’s credit card processing account.
People who chase credit card rewards often use this to their advantage.
For example, this quarter, one of the Chase 5% categories is gas stations. Gas stations can sell all sorts of other things, especially gift cards. People go into the gas stations, buy gift cards for grocery stores, hardware stores, online merchants, etc. They all show up as gas station purchases and they get the 5% rewards on those.
When I was trying to decide if I should get an Amazon card, which gives 5% off on Amazon purchases, I googled Amazon vs Chase card (I have a chase card). Someone said something along the lines of “Chase has the revolving rewards category, just go to a store in that quarter’s reward category and get Amazon gift cards, then you get 5% off on Amazon PLUS the perks year round perks of the Chase card”. I was sold. Granted, I haven’t done that, but still.
While we’re here, Chase always does 5% off on Amazon during Q4, so I slow down during the end of Q3 to pile them into October. Then, they did a surprise thing and doubled it and did 10% off in December on Amazon last year (and reset the limit). I don’t care what Samuel L Jackson says, I love my Chase card.
What % is lost to the gift card itself?
For closed-loop gift cards like restaurants, hardware stores and so on, there’s almost never a fee, so 0% is lost. On the open-loop Visa/MC cards you’ll generally lose a little over 1% if you’re dealing with $500 denominations. It gets way more costly if the store only sells $200 or even $100 cards.
Sometimes you can double-dip though and use a loyalty card for the gas chain and eventually recover some of your costs that way, whether it’s in the form of discounted fuel or a free case of beer.
Retailer gift cards almost never have any service fees. You can buy Amazon, Home Depot, Target, Safeway, Chili’s, McDonalds, Staples and hundreds of other gift cards (though few stores carry all these brands) for no fee – just the face value of the card.
Of course, if you lose the card or don’t use up the entire balance there will be a loss. And if you don’t pay off your credit card balance in full each month, there will be interest.
The “open loop” cards (like Visa, Mastercard, Amex, etc) generally have purchase fees that don’t make them good deals (unless there is some other promotion going on at the same time).
ETA: Sorry, core beat me to it.
I do this with a budget. Why do you need it automatically attached to an account? Are you trying to control a shopping-addicted spouse or child?
Thank you all! I knew the categorization is possible because some of my cards already do it, auto-categorizing 90% of my transactions and asking me to identify the remainder. I will look into a business card that supports the merchant category codes. Interesting thought!
I don’t think the gift card will work because they usually have some non-trivial monthly fee, but there are no-fee debit cards out there (Simple, Ally, Google Wallet, Paypal, Charles Schwab) that I’ll look into. Maybe just get one for household expenses and another for disposable income that I can splurge on beer with. We’ll see!
Hahaha. No… just trying to help a budget-ignoring, savings-destroying adult with no financial sense. Namely, me. A budget’s no good if I don’t have the self-control to stick to it! Trying to work up to that 
If you can find one that will do this for an individual account, it probably won’t be free. And also realize that business credit cards are not required by law to provide the types of protections that you may have come to expect from consumer cards, for example $0 liability for lost or stolen cards, extended warranties, etc.
Not exactly what you’re asking, but you can usually set up savings accounts with multiple sub-accounts (and regular automatic deposits, etc.) that might help you budget - good luck!