Nowadays many people use
“Credit” cards (credit cards) which are issued by some of the
banks. The gold cards cost 548 riyals and the silver cards cost
245 riyals. This amount is paid to the bank annually by the
person who uses the Credit card, like an annual subscription.
The way these cards are used is that the card allows the bearer
to withdraw as much money as he wants from the bank’s branches
as a loan, and he has to repay the same amount of money within
a period not exceeding fifty-four days. If he does not pay it
back within the period stated, the bank will charge interest of
1.95 riyals for each hundred riyals of money withdrawn. The
bank also charges 3.50 riyals for every hundred riyals of cash
withdrawn by the carrier of the card, or a minimum of 45 riyals
for every cash withdrawal.
The carrier of this card is also entitled to buy products in
stores that the bank deals with, without paying any cash, and
it becomes a loan from the bank. If he delays paying off the
cost of what he has bought for more than fifty-four days, they
will charge 1.95 riyals for every hundred of the price of the
products purchased from the stores that the bank deals with.
What is the ruling on using these cards and subscribing
annually to the bank in order to use these cards?.
Praise be to Allaah.
This question was put to the Standing Committee,
who replied:
If the credit card is as described, then it is a
new kind of riba-based transaction and of consuming people’s
wealth unlawfully, making them fall into sin and contaminating
their earnings and dealings. It comes under the same rulings as
the riba of the Jaahiliyyah which is forbidden in sharee’ah.
(Either you pay it off at the appointed time or you increase
the amount). Hence it is not permissible to issue such cards or
to use them. And Allaah is the Source of strength. May Allaah
send blessings and peace upon our Prophet Muhammad and his
family and companions.
Shaykh Ibn ‘Uthaymeen (may Allaah have mercy on
him) was asked about this and he said:
The answer is that a contract of this type is
not permissible, because it involves riba which is the price of
the card, and it also means committing to pay interest if
payment is delayed.
Islam Questions & Answers
www.islam-qa.com
Question Reference Number:: 13725
Title: Using credit cards is haraam even if you pay up within
the time limit
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Question:
I heard that using credit
cards is haraam, but if I am sure that I am going to pay the
bank within the time limit, so the bank will not charge any
interest, is this also regarded as haraam?.
Answer:
Praise be to Allaah.
What you have heard about credit cards being
haraam is correct. That has already been discussed in
question no. (13735)
Using them is haraam even if the user is
certain that he will pay the bank within the time limit.
It has already been explained in the answer to
the question mentioned that they are haraam because the bank
lends money to the user in return for interest, and this
interest is the price of the annual subscription to the
credit card, as well as other interest charges which are to
be paid to the bank if the user is late in paying.
The cost of the card is a kind of riba which
the user pays to the bank, and this riba is paid by the user
whether he pays on time or not.
Also, the user enters into a contract with the
bank which means that he is obliged to pay interest if he
delays payment. This is also haraam, because it is not
permissible for a Muslim to commit himself to doing something
that Allaah has forbidden.
The user may think that he can pay up on time,
but then something happens to him that prevents him from
doing so, so he pays riba to the bank.
Shaykh Ibn ‘Uthaymeen (may Allaah have mercy
on him) said concerning this kind of contract:
A contract of this type is not permissible,
because it involves riba which is the price of the card, and
it also means committing to pay interest if payment is
delayed.
In another fatwa he said:
This transaction is haraam, because the one
who enters into it commits himself to paying riba if he does
not pay on time. This is an invalid commitment, even if he
believes or thinks it most likely that he will pay it before
the time is up, because circumstances may change and he may
not be able to pay it off. This is a matter that is in the
future, and no one knows what will happen to him in the
future. So dealings of this type are haraam. And Allaah knows
best.