Common Pitfalls in the Halachos of Ribbis with Rabbi Ari Marburger

 

Facilitated by A. Weiss

 

 

Is it a problem to have a savings or investment account in a bank?

As a general rule, ribbis only applies if all sides of the transaction are Jewish. If the bank you are using is Jewish owned, then you will need to ask for a heter iska and make sure your rav approves of it. Anytime you are earning interest or go into overdraft, then you are effectively dealing with ribbis. (Both Apple Bank and First Commerce Bank in Lakewood are Jewish owned and have heter iskas upon request.)

 

What if I only have a checking account in the bank and never go into overdraft? Do I need a heter iska?

Since most banks will not charge for their services if you maintain a minimum balance, then it is a problem of ribbis. Even if you are not receiving payment in exchange for lending your money, you are receiving a service instead. However, there is a famous psak in Igros Moshe that ribbis only applies to a loan to a person, not a corporation (unless the loan is personally guaranteed). However, Rav Shloime Miller says b’shem Rav Aharon that one should get a heter iska in such a case. One should check with their own rav.

 

I don’t have any credit, so I am using a credit card in my brother’s name. Is that okay?

When you use someone else’s card—even if you are making payments directly to the bank—the debt is still in their name. The credit card company is lending the money to your brother, who is in turn lending the same funds to you. In exchange for the loan, you are paying back both the principle and his interest expense, which is ribbis. If you pay off the full balance of the card each month, it is not a problem since there is no interest. However, if you only pay the minimum balance and need to make interest payments, you end up with a very serious ribbis problem. By making those interest payments, you are paying interest to your brother, even though he is not making any profit.

 

Can I buy a car or a house in someone else’s name?

Since you will be paying interest with each payment, then it is a problem of ribbis, and you will need a heter iska for such an arrangement. Note that whenever taking a mortgage, one should ensure that the bank is either not Jewish or has a valid heter iska that your rav approves. If you need a cosigner, there should be a heter iska as well.

 

My daughter’s camp is offering an early bird discount if I pay the full amount when I sign her up. Is this a problem?

In Halachah, payment is due when the services are provided. Receiving a discount in exchange for paying in advance is generally ribbis d’Rabbanan. There are heterim that apply to certain cases, and a rav should be consulted.

 

I am moving into a new house in a few months and will need new furniture. The store told me that if I pay for half the couch now, then I will lock in the current price for when I pay for the rest of the couch. Is this a problem?

Yes, since you are locking in the price in exchange for advancing funds, and future benefit is considered ribbis. There are exceptions and qualifications to this halachah, and a she’eilah should be asked.