Many credit card users accumulate reward points, cashback and other benefits simply by making everyday purchases. But are these rewards permissible in Islam, or should Muslims avoid benefiting from them because they come from credit card companies?
According to Islamic finance scholar Prof. Dr. Monzer Kahf, credit card reward points and cashback privileges are permissible. They are promotional benefits rather than Riba (interest).
Why Are Credit Card Points Permissible?
Prof. Dr. Monzer Kahf explains that credit card rewards are offered as promotional incentives to customers. They are not necessarily payments of interest.
These benefits are funded, at least in part, through fees that credit card companies charge merchants for accepting card payments.
Therefore, receiving reward points or cashback does not, by itself, constitute Riba under the scholar’s explanation.
What Rewards Can You Benefit From?
Both types of rewards are considered permissible in the fatwa, provided they are promotional benefits of the kind described by the scholar.
“These are promotions, not interest.” Prof. Dr. Monzer Kahf
Should You Redeem the Points or Donate Them?
Based on this fatwa, there is no requirement to donate credit card reward points solely because they were earned through a credit card programme.
You may redeem the points for your own benefit, including receiving an item in exchange for accumulated rewards. Donating them voluntarily remains an option.
Important distinction: This ruling concerns reward points and promotional benefits. It does not establish that every credit card agreement is permissible. Any interest provisions or other contractual conditions must be assessed separately.
Based on the fatwa of Prof. Dr. Monzer Kahf, Professor of Islamic Finance and Economics.
