Why Islamic Credit Cards Are Halal in Islam With Proofs
C.J Ahmed-27.04.2023
A credit card is a plastic card used to purchase something on credit. An Islamic credit card provides all the services provided by a conventional credit card such as special rewards and cash backs but the main fundamental difference is that an Islamic credit card does not charge interest on late payments hence having such credit cards are not haram in Islam.
There is nothing haram in using an Islamic credit card in because,
As for using con ventional credit cards, it s generally not haram to ue them too.
The Interest (Riba) Argument against Credit Cards
This is one of the most trickiest and controversial issue on credit cards and the argument is that a person who is getting a credit card must sign the agreement that he will pay the interest if he fails to pay before the stipulated date and quote the following hadiths,
Abdullah ibn Mas’ud reported: The Prophet, peace and blessings be upon him, said, “Allah has cursed the one who consumes usury, its client, its witness, and its recorder. Usury and adultery do not become widespread among people but that they will become vulnerable to the punishment of Allah Almighty.”(Musnad Ahmed-GradedSahih by Zaid Shakir)
Ibn Mas'ud narrated:
"The Messenger of Allah (sal) cursed the one who consumed Riba, and the one who charged it, those who witnessed it, and the one who recorded it." (Tirmidhi-Graded Hasan Sahih by Imam Tirmidhi)
The bove hdiths mention that the person who takes interest, the one who charged interest and the one who witnessed it is cursed. The one who signs the agreement is not paying any interest but signing the agreement that if he/she delays the payment, theywill have to pay an interest. The interest is charged every onth in a credit card if you delay payment for purchases which is known as Daily Periodic Rate (DPR). You can simply avoid the interest by paying the credit before the stipulated date. Now the question would arise, “ what is I due o some reson cannot make the payment in due date and is charged for interest.?” The answer for this is with a few pragmatic solutions ane one Is,
A credit card is a a card that allows you to purchase something say, an item which you do not need to pay right now but can pay on a later date. This concept is not haram as there are authentic hadith permiting the purchasing goods on credit.
Narrated `Aisha:
The Prophet (sal) purchased food grains from a Jew on credit and mortgaged his iron armor to him. (Bukhari)
Narrated Ya'la ibn Umayyah:
The Messenger of Allah (sal) said to me: “When my messengers come to you, give them thirty coats of mail, and thirty camels. I asked: Messenger of Allah, is it a loan with a guarantee of its return, or a loan to be paid back? He replied : It is a loan to be paid back.”(Abu Dawud-Graded Sahih by Albani)
It is clear that the prophet (sal) and his companions did take loans and the basis of the functioning of a credit card is to take for credit which is not haram.
A credit card is a plastic card used to purchase something on credit. An Islamic credit card provides all the services provided by a conventional credit card such as special rewards and cash backs but the main fundamental difference is that an Islamic credit card does not charge interest on late payments hence having such credit cards are not haram in Islam.
There is nothing haram in using an Islamic credit card in because,
- There is no interest payment involved
- The payment is straight deducted from your bank account
- There are no penalty payments incolved which ar actually interest disguised as charges by banks.
- There is no abbiguity or doubt involved which is known as “Gharar” in Islam
As for using con ventional credit cards, it s generally not haram to ue them too.
The Interest (Riba) Argument against Credit Cards
This is one of the most trickiest and controversial issue on credit cards and the argument is that a person who is getting a credit card must sign the agreement that he will pay the interest if he fails to pay before the stipulated date and quote the following hadiths,
Abdullah ibn Mas’ud reported: The Prophet, peace and blessings be upon him, said, “Allah has cursed the one who consumes usury, its client, its witness, and its recorder. Usury and adultery do not become widespread among people but that they will become vulnerable to the punishment of Allah Almighty.”(Musnad Ahmed-GradedSahih by Zaid Shakir)
Ibn Mas'ud narrated:
"The Messenger of Allah (sal) cursed the one who consumed Riba, and the one who charged it, those who witnessed it, and the one who recorded it." (Tirmidhi-Graded Hasan Sahih by Imam Tirmidhi)
The bove hdiths mention that the person who takes interest, the one who charged interest and the one who witnessed it is cursed. The one who signs the agreement is not paying any interest but signing the agreement that if he/she delays the payment, theywill have to pay an interest. The interest is charged every onth in a credit card if you delay payment for purchases which is known as Daily Periodic Rate (DPR). You can simply avoid the interest by paying the credit before the stipulated date. Now the question would arise, “ what is I due o some reson cannot make the payment in due date and is charged for interest.?” The answer for this is with a few pragmatic solutions ane one Is,
- To pay the interest using any interest you have especially that is paid by a bank in your bank account. For an eample, if you have savings account,the bank will pay you interest depending on vrious factor and you can pay that interest money to settle the credit card interet.
- The other option will be to pay off the interest If you are capable becaue it is not your fult and it is not a sin evn if you paid the interest becue you intention was good. You are actually forced to pay interest and it is not a sin to do so.
A credit card is a a card that allows you to purchase something say, an item which you do not need to pay right now but can pay on a later date. This concept is not haram as there are authentic hadith permiting the purchasing goods on credit.
Narrated `Aisha:
The Prophet (sal) purchased food grains from a Jew on credit and mortgaged his iron armor to him. (Bukhari)
Narrated Ya'la ibn Umayyah:
The Messenger of Allah (sal) said to me: “When my messengers come to you, give them thirty coats of mail, and thirty camels. I asked: Messenger of Allah, is it a loan with a guarantee of its return, or a loan to be paid back? He replied : It is a loan to be paid back.”(Abu Dawud-Graded Sahih by Albani)
It is clear that the prophet (sal) and his companions did take loans and the basis of the functioning of a credit card is to take for credit which is not haram.