Question

Assalamu alaykum wa rahmatullahee wa barakahtuh,

Sheikh, I was wondering if it is permissible to use a credit card to get the cash back/rewards/points benefits. I’ve seen people talk about using a credit card to spend money that they currently have and to then pay off the amount immediately. This way, they say that they avoid the interest and reap the cash back/rewards benefits.

Is this permissible? If so, what are the conditions of doing so?

Answer

Contemporary scholars such as Mufti Taqi Usmani have permitted the use of credit cards provided that payments are made on time so that one does not have to pay any interest. Hence, if one takes out a credit card they must ensure that they only purchase items if they are able to make the payments within the allocated time period where interest is not incurred.

If the credit card company provides cash back, rewards or points it will be permissible to benefit from them. These benefits will be considered a gift from the credit card company.

One must bare in mind that if rewards are provided by a bank for depositing cash into an account then those rewards will be unlawful. This is because the deposits are considered a loan advanced to the bank and therefore the bank can only give the depositor the amount that was advanced as a loan. Any benefit beyond this amount will be interest. Hence, if they provide rewards to the customer those rewards will be an interest payment in consideration for the loan advanced to them.

This does not apply to a credit card as it is the credit card provider who are giving a loan to the customer and they are also providing the additional benefits. Hence this would not be considered interest.

الدر المختار وحاشية ابن عابدين (رد المحتار) (5/ 166)
قوله كل قرض جر نفعا حرام) أي إذا كان مشروطا كما علم مما نقله عن البحر، وعن الخلاصة وفي الذخيرة وإن لم يكن النفع مشروطا في القرض، فعلى قول الكرخي لا بأس به ويأتي تمامه

Fiqh al-Buyu 1:463

Answered by:
Ifta Research Fellow

Checked & Approved by:
Mufti Abdul Rahman Mangera
Mufti Zubair Patel