Q: I received the daily email which was regarding the impermissibility of the 3% cash back on the credit card. Many stores offer a point system which can be changed to cash to purchase in store. Is this permissible? If yes, what is the difference and what makes the first situation impermissible?
A: The difference between the both is that the store is giving you the points as a gift for purchasing a product from them. On the other hand, the bank is awarding you with points as a gift but this is based on the loan that they are providing you with via the credit card. Hence, in this case, it is an addition to the exchange of a loan which falls under the definition of riba.
And Allah Ta’ala (الله تعالى) knows best.
Answered by:
Mufti Ebrahim Salejee (Isipingo Beach)