My bank gives Reward/Loyalty points every time I use my credit card. I can redeem these points for a wide range of products. I can also redeem these points against my credit card outstanding amount. I have the following question regarding these points.
1. Is it halaal to use these points? If yes, can you also advise under which conditions these points become haraam to use.
2. Are the rulings same for the points earned in savings account? (Reward points in savings accounts are earned for salary credits, online transactions and purchase of bank’s products)
3. Are the cash backs given by the bank for credit card and savings account halaal?
I always get a thought that the primary source of bank’s income is interest money and whatever discounts/rewards the bank gives to its customers will directly/indirectly link to this interest money which is haraam to use.
In the name of Allāh, Most Gracious, Most Merciful
Assalāmu ῾alaykum wa Rahmatullāhi Wabarakātuh
The use of a credit card is allowed in the Shariah, regardless of whether the card is issued by a banking institution or some other company, subject to the condition that a person does not involve himself in interest.1
As such, the reward/loyalty points (redeemable for cash, permissible gifts, mileage, etc.) given by such institutions is considered hiba (a gift) and halal for you to redeem and use.2 3
However, if any reward points are given by the bank as interest on the money you deposited with them, or involve the purchase of bank products which are haram (prohibited) such as CDs, Treasuries, Mortgages, etc. then the reward points cannot be redeemed.
And Allāh Ta῾āla Knows Best
Wassalāmu ῾alaykum
Ml. Sohail Bengali
Correspondence Iftā Student, US.
Checked and Approved by:
Mufti Ebrahim Desai
Dārul Iftā, Madrasah In῾āmiyyah