diff --git a/cmd/categories.go b/cmd/categories.go
new file mode 100644
index 0000000..ff40e5e
--- /dev/null
+++ b/cmd/categories.go
@@ -0,0 +1,53 @@
+package cmd
+
+import (
+	"fmt"
+
+	"github.com/example/splitwise-cli/internal/api"
+	"github.com/example/splitwise-cli/internal/output"
+	"github.com/spf13/cobra"
+)
+
+var categoriesCmd = &cobra.Command{
+	Use:   "categories",
+	Short: "List available expense categories",
+	Run: func(cmd *cobra.Command, args []string) {
+		client, err := api.New()
+		if err != nil {
+			output.Die("%v", err)
+		}
+
+		categories, err := client.GetCategories()
+		if err != nil {
+			output.Die("%v", err)
+		}
+
+		if jsonOut {
+			output.JSON(categories)
+			return
+		}
+
+		if quiet {
+			for _, cat := range categories {
+				fmt.Printf("%d\t%s\n", cat.ID, cat.Name)
+				for _, sub := range cat.Subcategories {
+					fmt.Printf("%d\t%s\n", sub.ID, sub.Name)
+				}
+			}
+			return
+		}
+
+		var rows [][]string
+		for _, cat := range categories {
+			rows = append(rows, []string{fmt.Sprintf("%d", cat.ID), cat.Name, ""})
+			for _, sub := range cat.Subcategories {
+				rows = append(rows, []string{fmt.Sprintf("%d", sub.ID), "  " + sub.Name, cat.Name})
+			}
+		}
+		output.Table([]string{"ID", "Name", "Parent Category"}, rows)
+	},
+}
+
+func init() {
+	rootCmd.AddCommand(categoriesCmd)
+}
diff --git a/cmd/expenses.go b/cmd/expenses.go
index 5d76aee..c5b6cfb 100644
--- a/cmd/expenses.go
+++ b/cmd/expenses.go
@@ -113,6 +113,7 @@ var expensesCreateCmd = &cobra.Command{
 		split, _ := cmd.Flags().GetString("split")
 		currency, _ := cmd.Flags().GetString("currency")
 		paidBy, _ := cmd.Flags().GetString("paid-by")
+		category, _ := cmd.Flags().GetInt("category")
 
 		// Resolve defaults.
 		cfg, _ := config.Load()
@@ -137,6 +138,7 @@ var expensesCreateCmd = &cobra.Command{
 			Cost:         cost,
 			CurrencyCode: currency,
 			GroupID:      group.ID,
+			CategoryID:   category,
 		}
 
 		if split == "" || split == "even" {
@@ -277,6 +279,7 @@ func init() {
 	expensesCreateCmd.Flags().String("split", "even", `Split type: even, or exact:Name:Amount,Name:Amount (e.g. "exact:MemberA:60,MemberB:40")`)
 	expensesCreateCmd.Flags().String("paid-by", "", "Who paid (name, defaults to you)")
 	expensesCreateCmd.Flags().StringP("currency", "c", "", "Currency code (e.g. USD)")
+	expensesCreateCmd.Flags().Int("category", 0, "Category ID for the expense")
 
 	expensesCmd.AddCommand(expensesListCmd)
 	expensesCmd.AddCommand(expensesCreateCmd)
diff --git a/internal/api/client.go b/internal/api/client.go
index 130ac8e..00afe74 100644
--- a/internal/api/client.go
+++ b/internal/api/client.go
@@ -198,8 +198,9 @@ type ExpenseShare struct {
 }
 
 type Category struct {
-	ID   int    `json:"id"`
-	Name string `json:"name"`
+	ID            int        `json:"id"`
+	Name          string     `json:"name"`
+	Subcategories []Category `json:"subcategories,omitempty"`
 }
 
 // ---------- API Methods ----------
@@ -264,6 +265,21 @@ func (c *Client) GetFriends() ([]Friend, error) {
 	return resp.Friends, nil
 }
 
+// GetCategories returns all available expense categories.
+func (c *Client) GetCategories() ([]Category, error) {
+	data, err := c.get("/get_categories", nil)
+	if err != nil {
+		return nil, err
+	}
+	var resp struct {
+		Categories []Category `json:"categories"`
+	}
+	if err := json.Unmarshal(data, &resp); err != nil {
+		return nil, fmt.Errorf("failed to parse response: %w", err)
+	}
+	return resp.Categories, nil
+}
+
 // GetExpensesParams holds query parameters for listing expenses.
 type GetExpensesParams struct {
 	GroupID     int64
@@ -316,6 +332,7 @@ type CreateExpenseParams struct {
 	GroupID      int64
 	SplitEqually bool
 	Date         string
+	CategoryID   int
 	// For by-shares split: user_id -> {paid_share, owed_share}
 	Shares []ShareParam
 }
@@ -337,6 +354,9 @@ func (c *Client) CreateExpense(p CreateExpenseParams) (*Expense, error) {
 	if p.Date != "" {
 		params.Set("date", p.Date)
 	}
+	if p.CategoryID > 0 {
+		params.Set("category_id", fmt.Sprintf("%d", p.CategoryID))
+	}
 
 	if p.SplitEqually {
 		params.Set("group_id", fmt.Sprintf("%d", p.GroupID))
diff --git a/skills/splitwise/SKILL.md b/skills/splitwise/SKILL.md
index eaf56e5..45b3824 100644
--- a/skills/splitwise/SKILL.md
+++ b/skills/splitwise/SKILL.md
@@ -66,6 +66,9 @@ splitwise expenses create "Dinner" 120.00 --group "Trip"
 
 # Different currency
 splitwise expenses create "Dinner on Trip" 45.00 --group "Trip" --currency EUR
+
+# With a category
+splitwise expenses create "Groceries" 87.50 --category 18
 ```
 
 ### Other commands
@@ -74,6 +77,7 @@ splitwise me                          # Current user info
 splitwise groups                      # List all groups
 splitwise group "Household"           # Group details + member balances
 splitwise friends                     # List friends
+splitwise categories                  # List all categories with their id, name, and subcategories
 splitwise settle "MemberB"            # Record a settlement
 splitwise expenses delete 12345       # Delete an expense by ID
 ```
@@ -114,6 +118,7 @@ Run multiple `splitwise expenses create` commands in sequence. No special syntax
 - Group/friend names use case-insensitive partial matching
 - A configured default group means `--group` is optional
 - Amounts are USD by default (configurable via `splitwise config set default_currency`)
+- You can categorize an expense using the `--category <category_id>` flag. If the user provides enough context, make an effort to find and use an appropriate category by checking `splitwise categories`.
 - `--split even` is the default — expense split equally among all group members
 - `--split "exact:Name:Amount,Name:Amount"` — custom per-person split (amounts must sum to total)
 - The `--paid-by` flag defaults to the authenticated user