Answer
Wa `alaykum as-Salamu wa rahmatullahi wa barakatuh.
In the Name of Allah, Most Gracious, Most Merciful.
All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.
In this fatwa:
1- Points and other promotions are permissible.
2- It is none of your business what banks earn or do with other customers as long as your relation with your banker has no interest or other non-permissible elements.
In his response to your question, Prof. Dr. Monzer Kahf, Professor of Islamic Finance and Economics at Qatar Faculty of Islamic Studies, states:
If you pay the balance on time, always you are a free rider and it is permissible. Debit card is not better in this regard although I know there are people who claim that signing the contract of credit card is itself haram. I do not believe so, because the contract gives you the option to pay on time without interest.
Points and other promotions are permissible. Banks benefit a lot from interest on credit cards by people who do not pay on time but they also benefit from fees they collect from business that accept the cards. These fees are permissible.
Besides, it is none of your business what banks earn or do with other customers as long as your relation with your banker has no interest or other non-permissible elements. These points and privileges are permissible in my opinion.
Allah Almighty knows best.
Editor’s note: This fatwa is from Ask the Scholar’s archive and was originally published at an earlier date.