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Credit Card Balance Transfer

Answered as per Hanafi Fiqh by Askimam.org

Assallamualaikum Sheikh.

I have a question on credit card balance transfer. This does not charge any interest for a stipulated period of time but charges a fee, usually 3%, before thar transfer takes place. Please let me know if it would be permissible to involve in such transactions. Wassalam. 


In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh

A credit card balance transfer is the transfer of the balance (the money owed) in a credit card account to an account held at another credit card company.

In principle, the usage of a credit card is permissible on condition one is certain of abstaining from interest and late payment fees. The fees charged by the credit card company is only validated in exchange of an equal service provided and not in exchange of the credit provided as that would entail interest and hence prohibited.

With regards to your specific query, the 3% charged by the credit card company is in exchange of valid administrative costs and hence permissible. Moreover you should refrain from paying interest on the credit provided by the registering credit provider.

And Allah Ta’āla Knows Best

Ismail Desai,

Darul Iftaa

This answer was collected from Askimam.org, which is operated under the supervision of Mufti Ebrahim Desai from South Africa.

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