Are My Bank Card Fees Usury?

Answered by Shaykh Irshaad Sedick

Question 

I have a prepaid Visa card, and they take an annual fee of 5$ for the card, and a 1% fee out of every purchase using the card, is this interest or usury (riba)? 

Answer

In the Name of Allah, the Most Merciful and Compassionate. May Allah guide our hearts, tongues, and deeds to that which perpetually pleases Him.

Bank service charges such as those described do not comprise interest or usury (riba), and Allah knows best.

What is Interest/Usury (Riba)?

In Sacred Law, interest or usury (riba) is of two types: 

The first type involves usurious gain (riba) in sales. This form of usury is specific to the exchange of certain foods and gold and silver (or currencies). There are special laws that govern transactions of this nature. [Misri, ʿUmda Al-Salik]

The second type of usury concerns loans and consists of any loan by which the lender obtains some benefit (usually in the form of a stipulated increase over the original loan amount). [ibid.] The basis for its unlawfulness, before scholarly consensus (ijmaʿ), is such verses as: “Allah permits trade but forbids usurious gain.” [Qur’an 2:275]

Bank Services Charges

Bank service charges such as those described do not comprise interest or usury (riba), as they do not fit the previous descriptions. Services fees are charged (in the case in question) for the convenience and ownership of the card, and in exchange for the services rendered when making transactions,

and Allah knows best.

I pray this is of benefit and that Allah guides us all.

[Shaykh] Irshaad Sedick

Checked and Approved by Shaykh Faraz Rabbani

Shaykh Irshaad Sedick was raised in South Africa in a traditional Muslim family. He graduated from Dar al-Ulum al-Arabiyyah al-Islamiyyah in Strand, Western Cape, under the guidance of the late world-renowned scholar, Shaykh Taha Karaan. 

Shaykh Irshaad received Ijaza from many luminaries of the Islamic world including Shaykh Taha Karaan, Mawlana Yusuf Karaan, and Mawlana Abdul Hafeez Makki among others.

He is the author of the text “The Musnad of Ahmad ibn Hanbal: A Hujjah or not?” He has served as the Director of the Discover Islam Centre and Al Jeem Foundation. He served as the resident Imam of Masjid al-Munowar in Retreat, Cape Town for several years.

Shaykh Irshaad has thirteen years of teaching experience at some of the leading Islamic institutes in Cape Town). He is currently building an Islamic online learning and media platform called ‘Isnad Academy’ and pursuing his Master’s degree in the study of Islam at the University of Johannesburg. He has a keen interest in healthy living and fitness.