Question

I saw your answer about The Brick credit card. I would like your view about “Best Buy” financing facility as well. Since I am in Canada, I have been told there is a difference in the American and the Canadian facility. Your opinion will be greatly appreciated.

Answer:

Bismillahi Ta’ala,

Assalamu Alaikum Warahmatullah,

In principle, Flex Buy (Best Buy Card) is a similar financial instrument to The Brick Card. Best Buy Card offers a little more flexibility in their options. For this review, I have looked at their options on their Canadian website. (i)

Info: you can use this and any other plastic card for transactions to receive money. The company supports most of the worlds standards. You can always get your winnings in the best online casino CC-TV from Nederland which are chosen by the best players for quality and speed of service. Security and comfort when using cards during transfers is something that differs from most other companies.

Their credit card offers the following payment options.

In the promotional period they offer complete interest-free financing. However it should be notes that like any other interest-free offers, the credit card requires a minimum monthly payment.

The financing is not a lump-sum interest-free loan as some think. This is an integral aspect of these financial products. The entire financing product hinges on these minimum payments. In the Best Buy Card the different types of repayment method differ because of the way these minimum payments are calculated.  

In the “Equal Payments, No Interest” method the entire owing amount is simply divided over the number of month for the offer and this amount becomes the minimum monthly payment. Should there be a shortcoming in paying these minimum monthly payments (installments), the entire transaction will become interest based (at 29.9%) and hence sinful. (ii)

In the second method, “No Interest with Minimum Payments” the minimum monthly payments will have to be the greater of $10 or the 1% of the accrued amount. This is the procedure any conventional credit card works. It is designed such that a person will want to choose to pay only minimum payments. The result would be that at the end of the promotional period, he will still owe the initial capital amount and interest will thereafter start to accrue on the entire amount. The ploy is to lead the consumer towards getting the interest involved. Most people either do not pay the entire amount in this grace period, or fall short on the monthly payments and end up indulging in the interest charges. The ruling for this method is same as any conventional credit card, i.e. only utilize it if you are confident that you will pay it out before the interest kicks in. (iii)

The third method “Same as Cash with Min Pay” is similar to the previous one, however in this case there is no restriction of minimum amount of purchase. The same ruling will apply to this as well. (iv)

The last issue is the "Administration Fee" which the credit card company charges. As mentioned in the "Brick Card" answer, these could be inclusive of the merchant fee as well as other administrative cost for running the transaction and preventive features like credit fraud etc. Since these fees are in lieu of a genuine service, they are not interest charged on the accrued amount. 

In conclusion, no matter the variation of these financial products, the primary caution is:

1. Only use these facilities when the need is there.
2. Only use them when you are sure of paying them out before the interest is accrued.
3. If you feel you may not be able to keep up with the payments, DO NOT use these cards.
4. These cards are NOT a source of cash loans. Any cash advances or transfers through them are directly interest based. (v)
5. If you have the ability to pay out the accrued balance well before the promotion dates, then do pay them out. Do not wait until last moment and endanger falling into interest.

Wallahu A’lam,

Mufti Faisal al Mahmudi
www.fatwa.ca

1. http://www.bestbuy.ca/en-CA/bbycard.aspx (accessed 5th Oct 2014)
2. Equal monthly installments determined by dividing financed amount by number of months of offer. For example, if the financed amount is $360 for 24 months, your monthly installment is $15. Interest will accrue on financed amount at the annual interest rate of 29.9% from the purchase date but will be waived if you pay the monthly installment plus the remainder of the New Balance amount on your statement in full when due. If not paid in full when due, interest on unpaid monthly installment accrued from the date posted to account will no longer be waived and will be charged to account. (ibid.)
3. “No Interest with Minimum Payments” offer: Interest will accrue on financed amount at 29.9% from the date of the transaction but will be waived if financed amount paid in full on or before the Promotion End Date (shown on your statement). If not paid in full when due, or if your Best Buy account falls 4 billing cycles past due (which automatically terminates offer), interest on unpaid balance of financed amount will no longer be waived and will be charged to your account commencing the first day of your next billing cycle after such event. Min monthly payments equal to the greater of 1% of the financed amount or $10.00 required and will be included in your Base Payment due each month. (ibid)
4.  “Same as Cash with Min Pay” offer: No min purchase required. Interest accrues on financed amount at the annual interest rate of 29.9% from the date of the original transaction but will be waived if you pay the financed amount in full on or before the Promotion End Date (shown on your statement). If not paid in full when due, or if your Best Buy Card account falls 4 billing cycles past due (which automatically terminates offer), the interest accrued on the unpaid financed amount will no longer be waived and will be charged to your account. Min monthly payments equal to the greater of 1% of the financed amount or $10.00 required and will be included in your Base Payment due each month. See Card member Agreement for more details. (ibid)
5. There is no interest-free grace period for cash advances, balance transfers, convenience cheques, cash-like transactions and applicable cash advance fees. (Terms and Conditions for Online application for Flex Buy : https://ccsic.fni-stl.com/cgi-bin/bestbuy_canada_pl_idapply.pl?showfulldisc&CURR_SUB_PARTNER_ID=170&SOURCE_CODE=X2G9 )