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One day, Mr. Oshri was approached by his neighbor, Mr. Leibowitz, who ran a small business from his home. “Is there any way you can lend me $5,000 for a month or two?” Mr. Leibowitz asked.
“I don’t have $5,000 now,” Mr. Oshri replied, “but I expect to have it in two weeks. Can you wait?”
“I need money now,” said the neighbor. “If you agree, however, I can swipe your credit card through my business for $5,000. I’ll get the money in a day or two, and in two weeks you can make your monthly payment to cover it in the meantime.
“I agree with that,” Mr. Oshri agreed. Mr. Leibowitz swiped the card for $5,000.
Another neighbor, Mr. Fuchs, also approached Mr. Oshri for a $1,000 loan.
“I don’t have any spare cash,” Mr. Oshri said.
“I’m desperate for the money,” Mr. Fuchs said. “Can you take a cash advance on your credit card? »
“I can, but it’s very expensive,” Mr Oshri said. “There is a four percent fee for the advance, then a two percent monthly interest payment until the advance is repaid.”
“I have no choice,” said the neighbor. “I’ll cover whatever it costs you!”
Mr. Oshri took the cash advance of $1,000.
A month later, Mr. Leibowitz came to repay the loan. “Actually, I only got $4,900,” he told Mr Oshri. “I have a 2% processing fee every time I swipe a credit card. I’m happy to pay you $5,000, though, if there’s no ribbons prohibition.”
“They charged me $5,000! replied Mr. Oshri. “I don’t see why there should be a problem!”
At the same time, Mr. Fuchs came to return the $1,000. He wanted to pay Mr. Oshri the $40 cash advance fee plus the $20 interest accrued during the month.
Mr. Oshri suddenly wondered if this involved ribbons, since Mr. Fuchs gave back more than he borrowed. He approached Rabbi Dayan and asked him:
“Is there a problem with ribbons in all cases? How much do borrowers have to repay? »
“There is a fundamental difference between the two cases,” Rabbi Dayan replied.
“There is no violation of ribbons for expenses directly related to obtaining or granting the loan. For example, the Mishnah (BB. 167(b) teaches that the borrower is responsible for the cost of drafting the loan document” (CM 39:17).
“So an actual cost or expense, such as legal fees to draft a loan document or wire transfer fees, may be charged to the borrower. The mitzvah of granting a loan does not require you to spend money to grant it” (Break Yehudah 9:1-5; Ribbis’ Laws 4:1-4).
“You were charged $5,000 for the sweep, which is the amount you made available and loaned to Mr. Leibowitz. The two percent fee the credit card company charged her and deducted from the $5,000 is considered a cost for obtaining the loan.
“Similarly, in the second case, the initial fee of four percent for withdrawing the cash advance may be passed on to the borrower, whether it is a lump sum or a percentage of l ‘cash advance. However, the subsequent interest payment to the credit card company is not a cost of obtaining the loan, but rather interest that you, the cardholder, owe the credit card bank to the money you borrowed from him.
“Interest payments to a non-Jew for which the Jewish lender is liable cannot be ‘passed on’ to the borrower. This is not a cost associated with granting the loan; it results from the delay in reimbursement by the issuing bank. You are not allowed to take the $20 even if Mr. Fuchs agrees to pay it” (YD. 168:17; Ribbis’ Laws 4:5; 17:15-19).
“If you had written a heter iskaRabbi Dayan concluded, “You may also collect the interest amount from the credit card company, especially if the cash advance was made for business purposes.
Verdict: One-time fees charged for using a credit card can be passed on to the borrower, but not subsequent interest payments, without a valid credit card. heter iska.