Credit card permissibility depends on its type. If it is with no interest or it is added after a certain period it is permissible if the money is repaid before any interest accrues. But usurious cards are forbidden. 

Credit Cards

Similar Questions

• Marketing credit cards and using them;

• Working for a company that issues credit cards.

The Issue

Some banks and companies in non-Muslim countries issue credit cards to use in place of banknotes and coins, so people do not need to carry cash or keep it with them. Hence the question is about using such credit cards for one’s purposes, marketing them and working for the companies that issue them.

Ruling

In Decision 3-5, the Assembly of Muslim Jurists of America stresses the importance of credit cards because they can replace normal currency and carrying it around. As such, they are indispensable in our modern life. The decision considers credit cards in detail and what is lawful or unlawful about such cards, citing evidence in each case. It says:

Credit cards are of two types: the first is a card that is linked to the available balance in its holder’s account. The relevant company charges a set fee for issuing such a card, which is a permissible way of payment because what is paid through it is taken directly from its holder’s account. Therefore using such cards is permissible, as is issuing them and working for the companies that issue or market them.

The other type is a card that is not linked to the account of the holder. There are three categories of such cards: The first is a credit card issued for a set fee that is used to buy goods on credit with a specific means for repayment without incurring interest for late repayment. These are the type of credit cards issued by Islamic banking institutions, though as far as we know, these institutions do not operate in non-Muslim countries. These are perfectly lawful and using them is permissible, as also making them, issuing them and working for companies that issue or market them.

The second category is that of usurious credit cards. These are used to buy on credit with interest incurring on the money so advanced and as such are forbidden in Islam. It is not permissible to make or issue them, nor to work for the companies that issue or market them.

The third category of credit cards give the holder a specific period to settle what he owes without incurring interest. If he does not pay in full when this period is over then interest accrues on the balance. These are not permissible because they include an unlawful condition, hence it is not lawful to make, issue or work for the companies issuing or marketing them. However, a concession is given to those who need to use this type of card in cases of necessity, widespread practice and the unavailability of any alternative. Such use must be coupled with a knowledge that it is within one’s ability to repay and a firm intention to do so before any interest accrues.

Working in companies that make, issue or market cards that do not meet the conditions of permissibility remains forbidden because a concession to use something in case of necessity or great need does not apply to working in that industry, except in great necessity.

Sources

• Decisions of the Assembly of Muslim Jurists of America.

• Decisions of the European Council for Fatwa and Research.