Answered by Shaykh Faraz A. Khan
Question: I hope you are doing well. I have a question regarding the issue of balance transfers at 0% APR which are offered by some credit card companies in order to delay payments for up to 12 months. This is usually associated with a balance transfer fee of 3% or 5% on the amount of the balance which is transferred.
Is this type of transaction permissible, or does the balance transfer fee fall under the category of riba?
Answer: Assalamu alaikum wa rahmatullah,
I pray this finds you in the best of health and states.
A balance transfer fee is permissible as it is considered a fee for a service rendered, not interest.
And Allah knows best.
wassalam
Faraz
Checked & Approved by Faraz Rabbani