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Credit card interest


Rabbi Moshe Leib Halberstadt

Kislev 29, 5777
I let a friend of mine use my credit card for many years. My understanding was that he will pay the balance each month in full. But after a while he started paying only the minimum payments. Recently I was told that this could be called ריבית. Is that true? and if it is, what should I do about it?
As far as the credit card company is concerned, you are the borrower and the only one responsible. Your friend is not recognized as a relevant party. So in fact, you are lending your friend and cannot charge him any payment beyond the principle; because of the prohibition of Ribbit (interest). If he has already paid interest, you must reimburse him the amount of interest. From now on, if you would like to avoid the loss of paying the interest for your friend, your options are to ask him to pay the balance in full which does not carry any interest. Alternatively, you can make a "Heter Iska" (Transaction permit) between you and your friend. If you would like to get back the amount of interest you have already paid for your friend, or to avoid actually giving him back the interest he has already paid you, it is possible to retroactively include that amount in the "Heter Iska". It is important to note, that the "Heter Iska" should be done with a Rabbi who is an expert in the laws of Ribbit. (שו"ע יו"ד סימן קסח-קסט סעיפים יז, כב. וכ"ש הכא. וסימן קסא סעיף ה. ט"ז סימן קע ס"ק ג)
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