A HIDDEN TRAP - Credit Card Reward Points

The Muslims under unavoidable circumstances have to deal with the banks which are having Riba (interest) factor in their commercial dealings. In certain situations of the modern day transactions and for business purposes we are compelled to use the credit cards. When using credit cards certainly we have to be concerned not to default in paying back the credit amount.  

The point under the above heading is not the interest but the reward points which the credit card companies or the banks pay to the credit card users. Normally the commercial banks reward their clients when the clients do a purchase using that particular banks' credit cards. For instance in Sri Lanka 'one' reward point is earned for each purchase equal to LKR 100. Three reward points are equal to LKR 1. If someone earns 1500 points then he earns the amount of LKR 500 from the bank accounted to his credit card. The important thing to note is to keep an eye on the reward points.

In certain banks the customer has the control on his earned reward points. That is he can spend the reward points whenever he wishes. But in certain banks the reward points get redeemed automatically. This means riba gets mixed in your monetary dealings. Therefore it is necessary to keep an eye on your credit card statements to track your reward points which is a clear Reba factor in Riba involved banks.

Get the advice from the Islamic scholars on what to do with the interest money. Keep in mind that, credit cards increase your purchasing power. With credit cards you spend before you earn.

Take care and please watch your reward points when you use your credit cards.