Deferred payment

01 Jul 2024 Ref-No#: 6249

Asalamualikum, My question is as follows. The electronic company known as best buy have a promotional offer, where if you were to buy a laptop from them they would give you the option of deferred interest balance, where they will give you a period of 12 months to fully pay for the device without ever being charged interest within the 12 month period but if you don’t fully pay after the 12 months are up they would charge you interest at a rate under the individuals credit card agreement, is it therefore haram for me to use?

Answer

Wa‘alaykum as-salām wa raḥmatullāhi wa barakātuhu,

The deferred interest offer allows you to purchase a laptop and pay for it over a period of 12 months without incurring any interest charges, provided you pay the full amount within the stipulated period. If the balance is not paid within the 12 months, interest will be charged retroactively as per the individual’s credit card agreement. The core feature – having 12 months to pay without interest – is similar to a deferred payment plan, which is generally permissible (halal) in Islamic finance. You’re essentially buying the laptop on credit with a grace period.

Permissibility:

This type of arrangement is similar to using a credit card, which many scholars have deemed permissible under certain conditions:

  1. Intention and Means to Pay:
    • If you are confident that you have the financial means to pay off the balance within the 12-month period and are disciplined in managing your payments, it is permissible to use this deferred interest offer. The key is your commitment to settle the debt before any interest becomes due.

  1. Financial Confidence:
  • The key factor lies in your confidence and capability of paying the full amount within the 12-month period. As long as you’re certain you can manage your finances responsibly and avoid the future interest charges, it becomes similar to a regular purchase.

 

  1. Discipline and Assurance:
    • Just as with credit cards, the permissibility hinges on your ability to avoid incurring interest. If you are confident in your financial discipline and ability to adhere to the payment schedule, the transaction remains free from Ribā (interest).

Conclusion:

If you are certain of your financial ability and discipline to pay the full amount within the 12-month period, utilizing the deferred interest promotional offer from Best Buy is permissible. The critical factor is ensuring that you avoid any interest charges by settling the debt on time, similar to responsibly using a credit card.

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