Q: A few months ago, a technology company that makes and profits off smartphones and other devices (Apple) partnered with a US bank to offer a credit card.
The bank is responsible for all of the banking aspects, and the credit card is like any other one from a consumer perspective, offering cashbacks and rewards for certain purchases. However, these rewards are decided by the technology company, not the bank, such as discounts when purchasing that company’s own products.
Given the the card is offered by a technology company, it’s possible that the company pays for the difference instead of the bank. This would mean that unlike traditional cards, this one may not be paying for the discounts using interest earnings. Would using the benefits of this credit card be permissible?
A: If the credit card is acquired from the bank, then the cash backs and other benefits received through the card will be regarded as benefits obtained from the bank. These cash backs and other benefits are not permissible as they are conditional benefits acquired through a loan transaction. Any conditional wealth or benefit for any party in a loan transaction, over and above the loaned amount, is Riba.
And Allah Ta’ala (الله تعالى) knows best.
Mufti Zakaria Makada
Checked & Approved:
Mufti Ebrahim Salejee (Isipingo Beach)