According to the U.S. Federal Reserve, as of this writing only about nine percent of purchases are now made with cash or check, with the vast majority made using some form of credit. This is surely convenient for many customers, but if you fail to pay your bill on time, you’ll be charged a substantial fee. In addition, some stores will charge you more if you pay using credit rather than cash.
The rabbis also knew about the benefits and pitfalls of paying with credit. On today’s daf, they discuss whether levying a surcharge for doing so is kosher. The mishnah states:
If he sold his field and said to (the buyer): “If you give me (the payment) now, it is yours for 1,000 dinars, but if at the time of the harvest, 1,200 dinars” — this is prohibited.
According to the mishnah, a seller is not permitted to upcharge a buyer purchasing a field on credit. The extra 200 dinars, a 20 percent markup, is considered to be ribit, or interest, and charging interest to other Jews is prohibited by the Torah (Deuteronomy 23:21–22).
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This isn’t the end of the matter, however. The Gemara now introduces a new term: tarsha, or tacit interest, which according to Rav Nahman is permitted. He says that if a buyer and seller agree to a transaction at a later date at a higher price than the item being sold would be purchased today, it’s not really interest. Rather, it’s paying for the privilege of waiting to make the purchase, so this type of surcharge, tacitly agreed to by the buyer and seller, is not prohibited.
Unsurprisingly, there’s an objection:
Rami bar Hama raised an objection to Rav Nahman, and some say it was Rav Ukva bar Hama to Rav Nahman: “The mishnah states: ‘… but if at the time of the harvest, 1,200 dinars — this is prohibited.'”
Rav Nahman said to him: “There (in the case of the mishnah), he fixed for him. Here, he did not fix it for him.”
According to Rav Nahman, the type of surcharge he allows is different from that described in the mishnah. He views the case in the mishnah as clearly stating that the markup is interest: 20 percent higher for paying later. But in the situation he describes, as long as the seller does not specify outright that the higher price is due to the delayed payment, it’s a tacit agreement and therefore permitted.
This is similar to a case that’s common today: If you’ve rented an apartment lately, you may have encountered an offer to pay up front for a year and get a discount. If you choose to pay monthly, you pay more. It’s not stated outright that this is interest. Instead, it’s framed as a discount for paying up front, so according to Rav Nahman’s logic, this would likely be allowed.
Next, Rav Pappa, a beer merchant, jumps on the bandwagon:
Rav Pappa said: My tacit interest arrangement is permitted. What is the reason? My liquor would not be spoiled, and I do not need money. It is I who am performing (a beneficial matter) for the customer.
Rav Pappa sells liquor to a customer on credit when the market price is lower, but charges more because later, when the customer actually pays, the market price has increased. This is allowed, says Rav Pappa, because it benefits both the buyer (who can get his liquor now) and the seller, who earns the higher price because he waited to be paid.
Rav Sheshet disagrees with Rav Pappa, adjuring him to consider the matter from the customer’s standpoint: If he had the money, he’d have paid the lower price! Charging a higher price on credit is tantamount to interest and should certainly be prohibited.
One more voice weighs in: Rav Hama, who also touts his form of tarsha as permitted. Rashi notes that his practice was to offer merchandise to traveling salesmen on credit, allowing them to sell those items for more on the road and use the proceeds from the sale to conduct their own affairs until they return and pay up. Rav Hama notes this arrangement too benefits both the buyer and the seller:
It is convenient for them (that the merchandise remains) established in my domain, as anywhere that they go, the authorities leave them alone with regard to taxes and other people maintain the market for these sellers.
Rav Hama argues that his status as a scholar in the house of the exilarch means that merchants acting on his behalf receive special consideration, and the higher price they pay is due in part to these advantages.
As has surely become clear as we’ve parsed this daf, the arguments of the rabbis quoted are all self-serving. If the law agrees with them, their businesses benefit. Ultimately, the Gemara sides with Rav Hama (and Rav Nahman) and against Rav Pappa: Charging more when there’s a clear benefit to the merchant is different from charging interest for buying on credit, which is prohibited. Because it’s doubtful that this argument will work with your credit card company, though, it’s still best to pay those bills on time.
Read all of Bava Metzia 65 on Sefaria.
This piece originally appeared in a My Jewish Learning Daf Yomi email newsletter sent on May 3rd, 2024. If you are interested in receiving the newsletter, sign up here.
