Are Credit Cards Allowed If We Always Pay on Time?

Shaykh

Question

Esteemed Shaikh, we’re asking with regard to some banks that issue [credit] cards like the “visa card.” Perhaps the concept of this is clear. What it means is that it’s possible for the consumer [who carries such a card] to—instead of engaging in transactions with stores using cash values—present this card and take the desired goods. Then the amount is paid in full via the bank that the customer is dealing with [for his credit card].

The reason [the bank will pay for these credit transactions] is because the condition and the contract from the start between the customer and the bank is that if [the card holder] is late in paying [his credit card bill] by a certain period of time, interest fees accrue as a result.

Answer

[Shaikh Muḥammad ibn Ṣāliḥ Al-ʿUthaimīn, may Allāh have mercy on him, said:]

What this means is that he takes a [credit] card from the bank, and then, when he buys things he needs, he presents it to the ones from whom he’s buying these things and, [in effect], transfers them to the bank, and [then] the bank then pays on his behalf. But if he pays the bank back in full within a certain period of time, there’s nothing [due] upon him other than what he borrowed only; [meanwhile], if he is late [in paying back his credit card bill], extra charges become binding upon him.

I say: this is indeed not allowed [in Islam], since a person’s simply agreeing to commit to terms of interest is prohibited [in itself], whether interest then accrues [on him] or not.

This man says: “I am sure about myself that I’m going to pay [the credit card bills] back before due dates.”

So we say: Yes, you’re sure [about yourself], but are you certain [you will]? The money could get lost right in front of you; it could get stolen; you could die. You’re not sure. Allāh says:

وَلا تَقُولَنَّ لِشَيْءٍ إِنِّي فَاعِلٌ ذَلِكَ غَداً ۞ إِلَّا أَنْ يَشَاءَ اللَّهُ

And don’t ever say about something, “I am going to do that tomorrow”—without [saying], “inshā-Allāh” [if Allāh wills]. (Al-Kahf, 23-24)

After that, your simply agreeing to commit to the [condition] that additional charges will be laid against you, should the time [allotted for payment of the bill] be reached [without you having paid it]: this commitment is a commitment tied to interest, and any commitment tied to interest is prohibited [in Islam].

Because of that, we consider [these credit cards] impermissible; it is not allowed for a person to deal with them. However, if he has an account at the bank and the seller agrees to be switched over to the bank [for collection of the payment], then it’s an easy matter since there’s nothing involved in this other than [the buyer] having to carry a checkbook and write out [checks] to sellers from it.[1]

Footnotes

[1]: These days, we have “debit” visa cards which work on a similar basis to checkbooks: only money that is in a cardholder’s debit card account is immediately withdrawn to make purchases, with no possibility of interest charges accruing, since no debt is ever incurred. (tr.)

Translator: Mikail ibn Mahboob Ariff
xyz_twap: 1
enclosure: https://tasfiyah.com/wp-content/uploads/2024/04/Uthaimin-on-Credit-Cards.mp3 1983732 audio/mpeg
Date published: April 11th, 2024