Personal Finance Question: Rewards on credit card use and cashback rewards

Salaam Alaikum,

Is it impermissible to use rewards issued on credit cards usage ? For example air miles or tickets for events etc.

Also, what about cash back rewards

for paying your utility bills by direct debit through your bank account ?

Wa alaykum salaam,

It is permissible to benefit from the rewards issued by credit card companies. However, using a credit card will only be permissible if you feel confident of repaying the outstanding balance in time before any interest is incurred. Further, a credit card should only be availed of if it is necessary for you or you have recurring expenses which you use a credit card for.

In terms of cashbacks, if it is one of the common High Street bank cashbacks which require you to put a certain amount as deposit in your account, then such cashback schemes are not Shariah compliant.

Some types of cashback schemes are permissible, but that is usually structured as a pure incentive, reward and discount without any requirement from you to keep any funds in an account.

Allah knows best

Salaam Alaikum,

I have been paying £2 monthly for a certain type of current account that was rewarding me in the form of a small percentage in cashbacks on my direct debit utility bill payments . I have no recollection of every accepting to pay for this type current account and have queried this with the bank. It may have been a free reward and at some point changed to a paid one.
The cashbacks have accumulated and I want to now dispose of this money as i am assuming it is impermissble. My issue is that I may have transferred small amounts into my account historically , not realising that it was because I was being charged this monthly fee.
Do I need to try and ascertain all the rewards I have collected over the last 4 years and now dispose of those gains ?

May Allah reward you

Syrah Hassan

Assalaamu alaykum,

Yes, such rewards are not Shariah compliant.

You do need to dispose of all the gains you’ve received from this scheme. You should try your best to calculate and ascertain how much you’ve gained from here and give it all in charity.

Allah knows best