Interest related Questions..help plz

helpinghumanity

helpinghumanity

Junior Member
Assalamu Alaykum Warahamatullahi Wabarakatuh,

My dear esteemed brothers and sisters of TTI,


For the past few weeks a question has been lingering over my head. It had bothered me a great deal. I have been thinking of posting it on tti but time was not on my side

A week or two weeks ago, I received a monthly credit card statement of about $2429.25. An interest of an approximate amount $40 was also charged. I was surprised to see it on my credit card statement.

I called CITIBANK and inquired about the interest charge. After their explanation I came to know that the mistake was on my part rather then citibank. However at the same time i didn't want to indulge in interest.

I politely conveyed the following message of do or die to the citibank representative.

"I have been your loyal for over 5 years. I could have chosen any other credit card of my choice from any other bank at any time but i sticked with citibank because of their marvelous customer service.

The amount $40 is very small amount. However I am a Muslim and being a muslim i can't indulge in interest related matters no matter how small it is. Please understand that I have to abide my religious views, no matter what.......

Therefore i urge you to kindly remove this charge so that i can pay the remaining balance right now. But if you don't, then i am afraid that i will have to cancel this premium master card."

Okay so that was a small text of our conversation. To make the story short, after long conversation CITIBANK agreed to uplift this charge. But they said that they can't remove it from the current statement. They will give me a credit (subtract the equivalent amount from my next statement balance) in the next coming statement.

Today when i logged back in I did saw those credit. So the question that has been lingering over me like a sword is

"Despite of the fact that the interest amount was credited from my next statement, will i be still held accountable because interest was given and then credited back to me.
Did i performed an interest related activity. Did I took part in interest?"

Please answer to the best you can?

Jazakumullah khairun
 
Tabassum07

Tabassum07

Smile for Allah
:salam2:

It's concepts like these where TTI needs its knowledgeable members. How sad.

I'm trying to make sense of the situation - so they gave you interest money, right? If so, you can give that out to charity. Or did they take interest from you? I don't know what happens if you give interest.
 
helpinghumanity

helpinghumanity

Junior Member
Tabassum07 said:
:salam2:

It's concepts like these where TTI needs its knowledgeable members. How sad.

I'm trying to make sense of the situation - so they gave you interest money, right? If so, you can give that out to charity. Or did they take interest from you? I don't know what happens if you give interest.
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Wa alaikumus salam wa rahmatullah

In simple terms, I received my credit card statement. Interest was charged in that statement. Meaning I have to pay them interest.

I called them, they said they will refund the amount. That means..i will not have to pay them interest.

However, I will have to pay the full amount of my statement first. It means, i have to pay them interest and then in the next statement they will deduct it from the balance.

so its like i pay them 40 dollars interest and then they gave back 40 back to me after a month or any other specific time.

I hope it makes sense..

wassalam
 
J

JenGiove

Junior Member
:salam2: Brother,

It is a matter of paperwork for the computers. As I am not a Muslim I can not advise you according to Sunnah but to help you understand a little better about what and interest IS and why it exists, I will speak.

Interest is how banks and credit card companies make their money. The credit card companies borrow money from the banks and by using the cards, it is a plastic contract between you and the card company. When you are late paying your bill, the credit card company has to pay the bank anyways. You get "fined" by way of being charged "interest". That interest in mathematically calculated as a percent of the amount you own the card company plus extra for the trouble that you have caused.

Once you pay your whole bill, the credit card company can fool the computers and give you a "refund" of the $40....but they can not do that before hand. It is simply a matter of inablity of the computer system to understand the "logic" behind the pre-payment refund.

Beyond that, in relation to Islamic teachings, I can not talk about.

I hope this helps you at least a little....even if its just to understand a strange system.
 
Tabassum07

Tabassum07

Smile for Allah
helpinghumanity said:
Wa alaikumus salam wa rahmatullah

In simple terms, I received my credit card statement. Interest was charged in that statement. Meaning I have to pay them interest.

I called them, they said they will refund the amount. That means..i will not have to pay them interest.

However, I will have to pay the full amount of my statement first. It means, i have to pay them interest and then in the next statement they will deduct it from the balance.

so its like i pay them 40 dollars interest and then they gave back 40 back to me after a month or any other specific time.

I hope it makes sense..

wassalam
Click to expand...

:salam2:

Okay, I understand now. How we miss Brother Ayman in times like these!

Firstly, this is what I found about credit cards:

Nowadays many people use “Credit” cards (credit cards) which are issued by some of the banks. The gold cards cost 548 riyals and the silver cards cost 245 riyals. This amount is paid to the bank annually by the person who uses the Credit card, like an annual subscription.
The way these cards are used is that the card allows the bearer to withdraw as much money as he wants from the bank’s branches as a loan, and he has to repay the same amount of money within a period not exceeding fifty-four days. If he does not pay it back within the period stated, the bank will charge interest of 1.95 riyals for each hundred riyals of money withdrawn. The bank also charges 3.50 riyals for every hundred riyals of cash withdrawn by the carrier of the card, or a minimum of 45 riyals for every cash withdrawal.
The carrier of this card is also entitled to buy products in stores that the bank deals with, without paying any cash, and it becomes a loan from the bank. If he delays paying off the cost of what he has bought for more than fifty-four days, they will charge 1.95 riyals for every hundred of the price of the products purchased from the stores that the bank deals with.
What is the ruling on using these cards and subscribing annually to the bank in order to use these cards?.


Praise be to Allaah.

This question was put to the Standing Committee, who replied:

If the credit card is as described, then it is a new kind of riba-based transaction and of consuming people’s wealth unlawfully, making them fall into sin and contaminating their earnings and dealings. It comes under the same rulings as the riba of the Jaahiliyyah which is forbidden in sharee’ah. (Either you pay it off at the appointed time or you increase the amount). Hence it is not permissible to issue such cards or to use them. And Allaah is the Source of strength. May Allaah send blessings and peace upon our Prophet Muhammad and his family and companions.

Shaykh Ibn ‘Uthaymeen (may Allaah have mercy on him) was asked about this and he said:

The answer is that a contract of this type is not permissible, because it involves riba which is the price of the card, and it also means committing to pay interest if payment is delayed.
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Akhi, my advice to you would be to soon stop using credit cards, as a mistake means interest - its like playing with fire.

As for your interest that will be charged, but given back to you, I tried to search for similar situations, and though I'm unable to find an exact situation like yours, please look at the advise the Sheikh provided in this case:

I got married and lived in a small apartment for four years. When I was blessed with a child, we wanted to move to a bigger apartment, so I sold this apartment and used the price as a 50% down payment for a new apartment in a new suburb, and I wanted to pay off the rest of the price with the city, but suddenly I found out that the city’s system of accepting payments in instalments is very unfair, and they do not care that I have paid half of the price of the apartment, and they are going to charge interest on the full price, so I was forced to take a loan from the bank with riba. From that day I have been confused as to whether what I did comes under the heading of one who has no choice or not. If it was haraam, should I sell my old car in order to pay off some of this loan by way of a partial expiation for what I have done, and try to buy another car by instalments so long as the instalments are halaal, as I have read? I adjure you by Allaah to help me, because I am living in a country where the daar al-ifta’ regards most fiqhi issues as halaal too readily, and when I went to them they told me that this loan was permissible for me, but I know that it is haraam.


Praise be to Allaah.

Taking loans from banks or elsewhere under the interest system is a form of jaahili riba which was abolished by Islam, and declared to be extremely haraam, and concerning which a warning is issued that is not issued with regard to any other sin. Buying a house is not regarded as a necessity that makes riba permissible, because necessity refers to something the loss of which will cause death or almost cause death. The need for accommodation may be met by renting, or by staying in a small house, until Allaah makes things easier.

It would have been better for you to put up with the wrongdoing of the increase of the price of the apartment, instead of resorting to dealing in riba. Hence you have to repent to Allaah from this grave sin, and resolve not to do it again.

See also question no. 39829.

Remember that the more you hasten to pay off this loan, the better it will be, so that you can get rid of the effects of riba and its bad consequences, but you do not have to do that. Based on that, you do not have to sell your car in order to pay off part of the debt.

And Allaah knows best.
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Accordingly, the best method for you would be to pay off the statement as soon as you can, repent to Allah, and maybe stop using Credit Cards in future, vowing to never deal with interest again.

I would like some other TTI members to also comment that what I've said is okay, as I'm not knowledgeable on these matters.

How painful of a place TTI has now become - I dearly regret the loss of Akhi Ayman and dear Aapa - I feel like my family has been broken up, and I have been crying a lot because this place is so important to me, but now so many of my family are leaving. Aapa's leaving TTI, especially, hits me deep. Ah, this is why people should not get attached to anyplace or any person.

I need to take a break from this place. I leave you all in the care of Allah. If anyone will heed my advice (which doesn't really amount to much, and I doubt anyone would care) please do not fight with one another, and try to get along well.

:salam2:
 
arzafar

arzafar

Junior Member
helpinghumanity said:
Wa alaikumus salam wa rahmatullah

In simple terms, I received my credit card statement. Interest was charged in that statement. Meaning I have to pay them interest.

I called them, they said they will refund the amount. That means..i will not have to pay them interest.

However, I will have to pay the full amount of my statement first. It means, i have to pay them interest and then in the next statement they will deduct it from the balance.

so its like i pay them 40 dollars interest and then they gave back 40 back to me after a month or any other specific time.

I hope it makes sense..

wassalam
Click to expand...

yes that's ok as long as all transactions are done in the same currency. in these situations debit cards is better.

ideally off course one should avoid riba based banks altogether!
 
A

Abu Talib

Feeling low
Assalamu`alaykum Warahmatullahi Wabarakatu

According to me you have not constituted to or paid interest because at the end your billed $2429.25 only. Since you talked to them and maked sure you wont be paying Interest then they obliged and waived off so its clear they are not charging you. But since the amount might not tally their accounts as it was already billed upon $40 they asked you to pay first then would refund you back to balance the payments.

Inshaa'Allah your good
 
helpinghumanity

helpinghumanity

Junior Member
Tabassum07 said:
Accordingly, the best method for you would be to pay off the statement as soon as you can, repent to Allah, and maybe stop using Credit Cards in future, vowing to never deal with interest again.

I would like some other TTI members to also comment that what I've said is okay, as I'm not knowledgeable on these matters.

How painful of a place TTI has now become - I dearly regret the loss of Akhi Ayman and dear Aapa - I feel like my family has been broken up, and I have been crying a lot because this place is so important to me, but now so many of my family are leaving. Aapa's leaving TTI, especially, hits me deep. Ah, this is why people should not get attached to anyplace or any person.

I need to take a break from this place. I leave you all in the care of Allah. If anyone will heed my advice (which doesn't really amount to much, and I doubt anyone would care) please do not fight with one another, and try to get along well.

:salam2:
Click to expand...


Jazakumullah khairun sister for your response

Alhamdolillah i had already paid the total due balance on march 16.

However i can't believe you as well are taking a break from this place. Whats going on with TTI? I would request sister aapa to change her decision and I would like to ask you to do the same. We all need your assistance, your tips and we all have to benefit from your experience as we were on the verge on being in the outside world.
 
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