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Sood On Credit Card Cash Installment Plan
Dear Ghamidi sb Assalam o Alaikum,
I have already asked this question in different forums. However, I never got the answer from you. Actually I follow all of your programs, but, I am not getting clear understanding to apply on this issue. I will be highly grateful if you can express on the issue below:
I am living out of Pakistan where “credit limit” of credit card can convert as cash and return back to bank on “monthly installments+handling charges”.
I will be highly grateful if you can express on this issue that this “handling charges“ can be considered as Sood or not?
Thanks in advance.
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12 Replies
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Sood On Credit Card Cash Installment Plan
updated 3 years, 10 months ago
5 Members
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12
Replies
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Kindly elaborate further on the nature of transaction so that we can take a Scholar’s opinion if the same matter hasn’t already been discussed elsewhere.
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Assalam o Alaikum,
This matter hasn’t discussed in any other forum.
The matter is that I am living outside Pakistan and have an international bank credit card. The credit card has a credit limit of $X. The bank has given the facility to convert 80% of this credit limit into cash (say $Y = $X*0.8). The cash amount $Y can be used for any purpose.
While paying back the cash amount $Y in 12 – 60 monthly installments, the bank also charge ‘monthly handling charges (say $Z)’ with each monthly installment.
My question:
1. Is this monthly handling charges $Z counts as Sood?
2. I am now paying this with each monthly installment, so, should I am also “gunahgar” if this amount is Sood?
If my explanation and questions are still not understandable, pls email/send me any WhatsApp number so that I can discuss directly. Thanks in advance.
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Thank you for the explanation, will try to get a Scholar’s opinion on this transaction.
But in the meant time, please refer to detailed discussion on ‘Riba’ by Ghamidi Sahab as well; may be this will give you some perspective to see this transaction in the light of following discussion:
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Dear Umer,
Many thanks for sharing the link of series of programs on Sood. As you can see in my first post, I already followed all of these programs, but, I am not getting clear understanding to apply on this issue.
I am really thankful for helping me in this regard and looking forward for Scholar/Ghamidi sahab’s guidance. Thanks in advance.
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Hello Muhammad, I am not a scholar but a student. I have watched thousands of videos from respected scholars like Ghamidi Sahib, on all matters of life and studied Quran very carefully.
In my opinion, the bank may be renaming interest, “sood” as “handling charges” to make it more acceptable for Muslims.
Here is how to figure out if it is interest or ligitimate handling charges.
If the handling charges are somewhat proportional to the amount you borrow, then it is very likely that it is interest disguised as handling charges.
On the other hand, if the handling charges are exactly the same regardless of the amount borrowed then it is likely to be the ligitimate cost of handling account.
In any case taking “sood” is the sin that Quran describes. Giving Sood is a lesser sin in case you are borrowing money without having a pressing need to borrow. In this case you are assisting an illigitimate business and promoting the practice of Sood.
If you are borrowing money for a pressing need and you have exhausted all other possible options, then I do not think it is a sin on your behalf for paying Sood.
Also I believe that the greater sin on behalf of Sood taker is if the Sood percentage is extremely high and interest is compounded. Normal Sood with reasonable rate and without compounding may likely be a lesser sin. I am not sure. I am still researching that part
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What you have mentioned is called cash advance in the United States and the handling charges are called interest – these might be termed differently in different countries. The money that the bank takes on cash advance transactions is definitely riba – there’s no question about it.
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Thanks all of you for replying. However, it’s my fault that I missed one thing to write here that when I enquired bank about “what is handling charges?” Bank replied “if you pay the installments within due date we will charge you only monthly handling charges $Z (very small amount as compared to the monthly installment). But if you fail to pay the monthly installment within due date then we will charge you “32% interest” in that month.”
Then I enquired again “So, the monthly handling charges are different from 32% interest?” Bank replied “Yes, within due date you have to pay monthly handling charges and after due date 32% interest plus monthly installment“.
In view of above, it is bit confusing that “handling charges $Z” are straight forward “interest/Sood” or not?
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Also, as explained what is in Quran by Ghamidi sahab, gunah is on taking the interest/Riba and not on paying the interest/Riba.
In this case, if we assume bank is taking “monthly Handling charges $Z” and I am paying then I am not gunahgar.
However, bank is declaring that “monthly handling charges $Z” is different from interest (RIBA). That’s why it creates confusion and need Ghamidi sahab/Scholars opinion in this case.
Many Thanks in advance.
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It’s true that as per Ghamidi sahab’s explanation, the prohibition is on the consumption of riba.
Riba is not synonymous to interest. Whether someone calls it interest or handling fee, it is still money required to be paid to the lender on top of the original loan so it’s considered riba.
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pls. see this: https://youtu.be/xHEGJxoGO5Q
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In recent Q&A Session with Ghamidi Sahab on Questions selected from ASK GHAMIDI Platform:
For answer to your question, please refer to the video below from 1:17:07 to 1:18:20
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Assalam o Alaikum Ghamidi Sahab, Hassan Ilyas Sahab, All team members & Moderators,
I am really thankful for including my question and providing great scholar Ghamidi Sahab’s advise and guidance in light of Quran. This really clarify a particular issue which is new in its kind.
Jazak Allah Khairan Kaseera.
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