Is Credit Card Cashback Halal In Islam? (Yes/No)
People like to get rewarded when they make purchases of anything, and cashback is one of the popular reward options.
In credit card cashback, the card issuer pays you a percentage of your total purchase amount in return for using the credit card to make the purchase. The rewards vary from card to card, ranging from 1-5% of the purchase amount.
According to Islam, many Muslims are concerned about this type of reward as they want to know is cashback halal or haram.
In this article, we’ll answer is credit card cashback halal or haram in Islam with all the details you need to know.
Is Credit Card Cashback Halal?
The concept of cashback is halal, but when it comes to credit card cashback, it is haram. This is because using a credit card itself is haram in Islam, so it doesn’t matter what kind of rewards you get for using the credit card.
However, if you’re getting cashback from halal sources, then it would be allowed in Islam. For example, if you’re using a debit card to purchase something and are getting cashback from the merchant or using an Islamic bank credit card, it would be halal.
When you apply for a credit card in a conventional bank, the bank makes you sign an agreement that if you get late in payment, you will have to pay an extra amount of interest.
In Islam, usury or riba is totally haram. So even if you get cashback from a credit card, it is still considered haram as it is based on riba.
If you’re using an Islamic bank’s credit card, it is a different matter. Islamic banks don’t charge any interest as they are based on the principles of Islam, so using an Islamic credit card is considered halal. And so, if they give a cashback reward, then it will be halal.
For more on why credit cards are haram, you can read is credit card halal.
Why Is Credit Card Cashback Haram?
The main reason why credit card cashback is haram is that it involves riba. As we mentioned above, when you use a credit card from a conventional bank, the bank will charge you an interest rate if you make late payments. This is usury, and it is haram in Islam.
So, even if using a credit card is haram, then the reward you get for using it (cashback) is also haram.
Along with riba, there are other reasons why credit cards can be deemed haram. The main one is that it encourages people to spend more than they can afford.
Since credit cards are a form of borrowing, it encourages people to borrow money and not necessarily pay it back in full. This is also haram in Islam.
Along with that, Islam teaches us to practice financial discipline and be responsible with money. Credit cards are not the best way to go about it as they can easily lead to overspending and financial problems.
For the Islamic view on using debit cards, you can read here is debit card halal.
FAQs
Q. Are credit card rewards halal?
A. No, credit card rewards are not halal as the credit card itself is haram in Islam.
Q. Are cashback cards halal?
A. It depends on the type of card. If it is a credit card from a conventional bank, then it is haram. However, if it is a debit or Islamic bank credit card, it is halal.
Q. Is cashback on credit card haram?
A. Yes, cashback on credit cards is haram as the underlying transaction (using a credit card) itself is haram in Islam.
Q. Is cashback halal?
A. It depends on where the cashback is coming from. There are two main sources of cashback: credit card companies and retailers. Credit card companies offer cashback as a reward for using their credit cards for purchases. This type of cashback is considered haram (forbidden) in Islam as it involves riba (interest). However, cashback offered by retailers is considered halal as it is a form of discount for purchasing goods or services.
Q. Is credit card cash back halal?
A. No, credit card cashback is considered haram in Islam. This is because credit card companies charge interest on the balance owed, which goes against Islamic principles of avoiding riba (interest).
Q. Is cashback halal hanafi?
A. According to the Hanafi school of thought, cashback is considered halal as long as it does not involve any interest or unlawful means. This means that if the cashback is from credit card purchases or promotions, it would be considered haram as credit cards themselves are not permissible in Islam.
Q. Is cashback halal on debit cards?
A. Yes, cashback on debit cards is considered halal as it does not involve any interest or unlawful means. Debit cards operate on a different principle compared to credit cards, where the money spent is directly withdrawn from the user’s bank account rather than borrowing money from the bank.
Q. Is credit card reward points halal?
A. No, credit card reward points are not considered halal as they involve interest and unlawful means. Similar to cashback, the concept of earning rewards for using a credit card goes against Islamic principles.
Q. Are credit card points haram?
A. Yes, credit card points are considered haram as they involve interest and unlawful means. Islam prohibits any form of transaction that involves interest, as it is seen as an unjust way of making money.
If you like the lottery, you must learn is lottery haram.
Conclusion
Credit card cashback is haram in Islam as it involves riba, encourages people to overspend, and goes against the principles of Islam.
However, if you are getting cash back from halal sources such as an Islamic bank credit card or a debit card, then it is allowed in Islam. As the concept of cashback is halal, it depends on where you’re getting it from.
I hope this article has answered your question regarding is credit card cashback halal in Islam. If you have any further questions, feel free to contact us.
