Date : 05-08-2018

Question :

What is the ruling on using credit cards?

The Answer :

All perfect praise be to Allah, the Lord of the Worlds, and may His peace and blessings be upon our Prophet Mohammad and upon all his family and companions.

Credit card is a modern means of payment used by people to avoid carrying cash during travel. Credit cards are of two types: covered and uncovered, and the ruling of Sharia on each varies according to their nature. The relationship between the issuer and the client-covered type- is one in which the former is authorized to pay off on behalf of the latter. Therefore, it is permissible for the issuer to receive a fee against the card.

On the other hand, the relationship between the issuer of the second type and the client is one of guarantee and loan. Therefore, it is forbidden for the issuer to charge a fee against this card.However, this excludes the actual cost of the card`s issuance. The reason is that charging a fee against guaranteeis forbidden by consensus of the four legal schools. In addition, it is forbidden to use the card if it includes a usurious condition which stipulates that the holder/client should pay a certain sum in case he failed to pay off the due debt {Uncovered withdrawals}. Resolution No. (108/2/12) of the International Islamic Fiqh Academy stated: "It is forbidden to issue an uncovered credit card, nor to use it if it was conditioned with an interest, even if the client was determined to settle payments within the free grace period." Moreover, there is a number of general conditions that should be observed when dealing with such cards, and these are:

1-The issuer doesn`t stipulate receiving a usurious addition,ifthe client failed to pay on time.

2-The trader doesn`t charge an extra amount over the true price of the commodity, because of the commission which is charged from him by the card`s issuer.

3-The purchased commodity isn`t gold, silver or currency, in case the card was uncovered.

In conclusion, it is permissible to use the cards mentioned in the above question if the afore conditions and rulings are observed. And Allah knows.