My son needed a credit card, and due to his poor credit rating, I arranged that a friend of mine should lend him his credit card. My son recently discovered that this violates the prohibition of ribbis. The credit-card company loaned money to my friend (credit-card holder), who in turn loaned the money to my son. When my son committed to make interest payments to the credit-card company, he was committing to pay more than he borrowed (ribbis). I feel terrible that my friend will now be stuck with making interest payments for my son’s purchases.

Q: Is there anything that we can do to prevent my friend from suffering a financial loss for the favor he did?

A: If you, the borrower’s father, wish to make the interest payments at your expense to the credit-card company, you may do so.

The Torah’s ribbis prohibition is violated when ribbis is paid to the lender by the borrower. Therefore one is permitted to approach a potential lender and commit to make interest payments if he extends an interest-free loan to the borrower (Y.D. 160:13) and provided that he doesn’t obligate himself to make accruing payments for the duration of the loan (Taz 160:6).

It is prohibited for the borrower to furnish or commit to reimburse the third party. The reason is that it makes it appear that the third party is the borrower’s agent.

According to some authorities, it is prohibited for the borrower to convince a third party to make his interest payment since it makes it appear as though the third party is acting as an agent of the borrower. Many others disagree and permit a borrower to ask a third party to pay ribbis to his lender so that he will be willing to lend him money. Asking a third party to make this payment is irrelevant provided that the third party uses his own money, since the interest did not go from the borrower to the lender (Shach, Y.D. 160:18; S.A. Harav, Ribbis 60).

Some contend that all opinions concur that the borrower may not inform the lender that a third party will give him money to ensure that the lender will issue a loan, since doing so makes it appear as though the third party is acting as an agent (Y.D. 160:13; S.A Harav ibid.). Others maintain that according to the lenient opinion, even this is permitted (see Chavas Daas 6; Pischei Teshuvah 9).

The above applies when the original loan was not an interest-bearing loan. There is a debate whether it applies when the original loan was an interest-bearing loan, as in your situation. Some authorities permit a third party to make interest payments provided that the borrower does not reimburse the third party nor ask someone to make the interest payments on his behalf (Bris Yehudah, Ikrei Dinim 6:1; Kuntres Acharon to Kitzur Dinei Ribbis 12:7, citing Rav Elyashiv and Rav Sternbuch).

Others contend that it is prohibited when the original loan was an interest-bearing loan (see Nesivos Shalom 160:13:[13-15]). In order to comply with all opinions, you should inform your friend that you are not paying the interest your son committed to pay him; rather, you are giving him a gift so that he will forgo the money that your son owes him (Chelkas Binyamin 160:13, d.h. “v’gam.” He also considers that in a situation where the original loan was interest-bearing, the borrower may be permitted to reimburse the third party at a later time, after the loan is repaid).

Please note that the likely breach of contract with the credit company is a separate issue not dealt with in this article.