Are Credit Cards Haram According to Islamic Law

Islamic law, or Sharia, has a lot to say about credit cards. In fact, many Muslims are unsure if using credit cards is haram, or forbidden, under Islamic law.

Some scholars argue that credit cards are a form of riba, or usury, which is explicitly prohibited in the Quran. According to the article, the Quran states "Those who consume interest cannot stand [on the Day of Judgment] except as one whom the Satan has prodded with his touch" (2:275).

Using credit cards can also lead to debt, which is considered a form of riba in Islamic law. As mentioned in the article, the Prophet Muhammad (peace be upon him) said "The similitude of a Muslim who pays off his debt is like that of a man who has a wolf in his home, he is safe as long as the wolf is not hungry."

Many Muslims choose to avoid credit cards altogether, opting for cash or debit cards instead. This way, they can avoid the risk of accumulating debt and ensure that their financial transactions are in line with Islamic law.

Riba is prohibited in Islam, and credit cards can involve riba, especially if you hold a recurring balance month over month and pay off your statement balance on a monthly basis. Credit card companies often take advantage of low-income and financially unaware individuals.

Islamic banks offer Shariah-compliant credit cards and lines of credit that do not charge interest, making them a more convenient and fair option. Unfortunately, there aren't any viable Islamic-based credit cards in the United States.

Some scholars argue that traditional credit cards are impermissible due to the riba contractually involved, even if you plan to pay your balance on time. This is because you and the bank enter into an Islamically invalid contract.

Scholarly opinions vary on this topic, with some deeming traditional credit cards permissible under certain conditions. However, this is not the case in the US market, where Islamic banks have not launched Shariah-compliant alternatives to conventional credit cards.

Credit card companies often charge extremely high interest rates, making it difficult for people to pay off their balances. This exploitative practice is one of the reasons interest is considered haram.

Islamic scholars have varying opinions on the permissibility of credit cards in Islam. The International Islamic Fiqh Academy passed a resolution stating that if usurious interest is imposed on the borrowed amount, then the credit card in question is impermissible in Shariah.

Some scholars, like Dr. Muhammad Salah, deem credit cards permissible for Muslims living in non-Muslim countries without halal alternatives. He advises Muslims to ensure they don't postpone payments by setting up direct withdrawals from their account.

On the other hand, Sheikh Assim-al-Hakkem considers the use of credit cards a prohibited transaction, especially for those who tend to spend excessively and end up paying interest.

Yasir Qadhi, an Islamic preacher, suggests that credit cards can be used in cases of genuine need, but not as a matter of convenience. He emphasizes that only those who truly require a credit card should get one.

A key point to consider is that many Islamic scholars agree that credit cards are permissible if paid in full before interest is charged. However, they caution against using credit cards for unnecessary purchases.

Here's a summary of the views:

Ultimately, the decision to use credit cards should be made with careful consideration of one's financial situation and commitment to Islamic principles.

In many Muslim-majority countries, credit cards are widely accepted and used, despite some Islamic scholars' reservations about their haram status.

In Malaysia, for example, credit cards are issued by Islamic banks, which adhere to Shariah principles and offer interest-free credit facilities.

In contrast, some Islamic scholars argue that credit cards are inherently haram because they involve interest and usury, which are forbidden in Islam.

The International Islamic Fiqh Academy has a clear stance on credit cards. They believe that if usurious interest is imposed on the borrowed amount, the credit card is impermissible in Shariah.

Their resolution, number 63/1/7, was passed after studying several research papers on the topic. This resolution highlights the importance of considering the impact of interest on borrowed money in Islamic law.

The Academy is generally of the view that if interest on usury is added to the amount borrowed, the card is not admissible under Shariah. This means that credit cards involving interest are considered haram in Islam.

Interestingly, the Academy notes that if the cardholder can pay the loan before interest is imposed on the loan amount, the credit card is still considered haram. This emphasizes the importance of avoiding interest altogether in Islamic finance.

Credit cards have been a topic of debate among some groups, who argue that they are unconstitutional due to the riba contract, which involves interest on borrowed money.

In the eyes of some, credit cards that have traditional features are seen as relying on this riba contract, even if the cardholder plans to settle the amount in full.

The riba contract is a concept that has been discussed in various contexts, including a group of students who are convinced that credit cards are unconstitutional because of it.

However, it's worth noting that the constitutionality of credit cards is a complex issue that may not be clear-cut.

Some groups may view credit cards as a necessary evil, while others see them as a way to avoid the riba contract altogether.

Credit cards can be a bit confusing, especially when it comes to understanding their relationship with Islamic principles.

The concept of riba, or interest, is a key factor in determining whether credit cards are haram. Muslim scholars are unanimous that credit cards without interest are permissible in Islam.

There are two main schools of thought when it comes to credit cards and Islam. One group of scholars believes that credit cards involving interest are totally haram, while another group thinks that conventional credit cards are permissible if you pay back the borrowed amount in time to avoid riba.

To understand credit cards, it's essential to grasp their basic principles. In essence, credit cards are loans that allow you to buy goods and services. You're borrowing money from the credit company, which you'll need to repay, along with charges and interest.

Your credit limit is the maximum amount you're allowed to borrow, set by the credit card company based on factors like your credit score and income. Keeping your credit utilization ratio low is crucial to maintaining a good credit score.

Here's a breakdown of the two major schools of thought on credit cards and Islam: