When your friend pays interest or late fees, even if paid directly to the credit-card company, the prohibition against interest was violated. This is because you borrowed the funds from the credit-card company and lent those funds to your friend.. Your friend only borrowed from you the amount of the initial charge. The interest that accrues is your obligation to the bank and if your friend makes that payment, he is repaying more than he borrowed.

This also occurs when one makes a friend an authorized user or when a partner uses his personal credit card for joint business. (Earning points on your friends purchases is not an issue of ribbis)

Therefore, to avoid uncomfortable situations, it is essential to be alert and proactive by drafting an appropriate heter iska.

In a case where the initial owner is responsible for the payments, the authorized user is considered to be borrowing the money from the initial owner. ​Therefore, any interest that is being paid is ribbis. A heter Iska can rectify this.

The points earned by a cardholder when someone else borrowed his credit card are not a benefit that the borrower is giving to the cardholder. The points are a gift from the credit card company to encourage people to use their credit card

When someone “borrows” your credit card, two loans are being made. There is a loan from the credit card company to you and a loan from you to your friend. The credit card company has an agreement with you, the cardholder, and whenever the card is swiped, it obligates you to pay the amount charged, plus any additional fees and penalties.

When you “lend” your credit card to a friend, you, the cardholder, agree to assume a debt because your friend assures you that he will repay. This obligates him to compensate you based on the concept of arev (guarantor). An arev of this type is comparable to a borrower, and from a halachic perspective, has borrowed the money from you. If the payment is late, the credit card company will charge you a fee that constitutes interest, but you may not obligate your friend to reimburse you for that expense, since it would involve charging him interest.

Even agreeing that he will pay the credit card company directly violates the prohibition, since in reality, he is paying money to the credit card company to satisfy your debt, and paying more than was borrowed violates the prohibition against interest.

If you, the cardholder, agree to pay any fees and penalties that result from his charges, the agreement is permitted, but if you don’t want to have to bear those fees and penalties, you should draw up a heter iska

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In this case, the issue of ribbis does not apply, and you may collect even the finance charges from the one who used it. The reason is that the prohibition of ribbis applies only when there was a loan and the borrower pays back more than he borrowed.

In this case there was no loan. Your friend caused you damage by charging money on your credit card and then allowing finance charges to accrue. Someone who damages another’s property is obligated to reimburse his victim the cost of the damage. The fact that some of the damage results from accruing finance charges is irrelevant.

When you are buying with a credit card, the store/business owner does not receive the funds until later. They are considered, therefore, as selling merchandise to you on credit.

Adding a charge when buying with a credit card card is ribbis.

A processing fee to cover the processing cost of the company with no additional markup is allowed.