Is It Permissible To Use The Point System Given By The Banks?

Question:

I know that banking and credit cards are Haraam due to involvement of Riba (interest), is it permissible to have credit card and taking monetary benefits from them like points system, someone uses credit card and get points and those points will be paid back as cash, this is an incentive to use credit card more.

Answer:

In the name of Allah, Most Gracious, Most Merciful

Assalaamu `alaykum waRahmatullahi Wabarakatoh

It is permissible to make use of a credit card facility on condition the card holder makes timeous payments and avoids interest being charged to him.

The banks loyalty points (redeemable for cash, permissible gifts, mileage, etc.) given by such institutions is considered hiba (a gift) and Halaal for you to redeem and use.

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 Haraam (prohibited) such as Treasuries, Mortgages, etc. then the reward points cannot be redeemed.

And Allah Ta’āla Knows Best

Checked and Approved by,
Mufti Ebrahim Desai.