Section 1: Credit cards:
Firstly: The definition of credit cards.
A credit card is a document issued by the issuing bank to an individual or entity, i.e. the cardholder, based on an agreement between them which allows the user to buy commodities or services without immediate payment as there is guarantee by the issue for payment, and the payment is made by the account of the issuer, then it returns to the cardholder on a regular schedule, and some of these cards stipulate interest on the entire unpaid amount after a specific period from the payment due date, and some of them do not stipulate any interest. [2011] See: ((Islamic Fiqh Institution Journal)) Issue Seven (1/ 559).
Secondly: The Ruling on Using Debit Cards [2012] Credit cards: These are cards that are used to withdraw or pay from the cardholder's account in the bank, not from the issuer’s account, and thus are 'covered'. See: ((Islamic Fiqh Academy Journal)) Issue Seven (1/ 559).
It is permissible to issue and use debit cards if there is no interest associated with it as confirmed by the Islamic Fiqh Assembly [2013] The Islamic Fiqh Academy ruling states: "Issuing covered credit cards and dealing with them is permissible, provided their terms do not require interest payment in case of delay in repayment." See: ((Islamic Fiqh Academy Journal)) Issue Fifteen (3/ 219). under the Organisation of Islamic Cooperation, the Accounting and Auditing Organisation for Islamic Financial Institutions, [2014] The Sharia Standards of the Audit and Accounting Organization state: "Institutions can issue instant discount cards as long as the cardholders withdrawing from their balance, and no usurious interest is generated by its use." See: ((Sharia Standards)) (pages 79-80). and the Jordanian Ifta Department. [2015] According to a fatwa from the Jordanian Ifta Department: "Visa credit cards are a modern payment method, aimed at reducing the burden of carrying cash during transit. They are divided into two types: either the balance is covered or not. The ruling differs according to their nature, and the relationship between the card issuer and its holder, if the balance is covered, is an agency relationship for payment. Hence, the card issuer may charge a fee for it." See: ((Official Website of the Jordanian Ifta' House)) Fatwa (Number 3408).
This is because the following: [2016] See: ((Sharia Standards)) (page 86), ((Official Website of the Jordanian Ifta' House)) Fatwa (Number 3408).
(1) There is no Islamic prohibition regarding this, and the default position is permissibility in matters of transactions.
(2) This is because the relationship between the card issuer and the cardholder is one of guarantorship, thus any money withdrawn is done immediately with no additional benefits.
Thirdly: The Ruling on Using Credit Cards
Issuing and dealing with credit cards is not permissible if they stipulate an increase in usurious interest, even if the cardholder intends to pay within the free grace period.
However, if the card does not include the condition of a usurious increase on the original debt, its issuance is permissible, as confirmed by the Islamic Fiqh Assembly under the Organisation of Islamic Cooperation, [2017] The Islamic Fiqh Academy states that issuing and dealing with credit cards is not permissible if they stipulate an increase in usurious interest, even if the cardholder intends to pay within the free grace period. It is permissible to issue debit cards so long as there is no interest stipulated upon the principle of debt - Majalat Al Fiqh Al Islami Edition 12 (676- 675/3) the Accounting and Auditing Organization for Islamic Financial Institutions, [2018] The Sharia Standards of the Audit and Accounting Organization state that it is permissible for institutions to issue credit cards on the basis that there is no interest subject to the user upon delay. Additionally, institutions should be able to stipulate that the card user does not engage in anything unlawful and be able to cancel the card in the event of such violation. and the Jordanian Fatwa Authority, [2019] The Jordanian House of Ifta issued a fatwa stating: (If the card is not covered with enough balance, then the relationship between the card issuer and the holder is a relationship of guarantee and loan, it is not permissible to charge a fee for this relationship—except for the actual cost of issuing the card—because pay for a guarantee is unanimously not permissible according to the jurists of the four schools of thought. Moreover, it is not permissible to use the card if it entails a usurious clause that stipulates the cardholder should pay a sum if he is late in repaying his debt (his overdrawn withdrawal). In this case, it is not permissible to benefit from it in this manner, even if the client is sure of his commitment to the repayment date; because stipulating usury in a loan is sufficient in making it forbidden initially.) ((Official Website of Jordanian House of Ifta)) Fatwa (No. 3408). this is because the relationship between the card issuer and its holder is a relationship of guarantee for a fee, and a loan with usurious interest if there is a delay in payment; therefore, it is not permissible to charge a fee for this relationship. [2020] In a Fatwa from the Jordanian House of Ifta, it states: (Visa credit cards are a modern payment method, aimed at reducing the burden of carrying cash while moving around. They are divided into two types: either they are covered with balance or not. The rule varies according to their nature. The relationship between the card issuer and the holder - if the card is balance-covered - is an agency relationship for payment. Therefore, it is permissible for the card issuer to charge a fee for it.) ((Official Website of the Jordanian House of Ifta)) Fatwa (No. 3408).
Fourthly: Buying gold and silver with credit cards.
It is permissible to buy gold and silver with a secured credit card and is not permissible if the card is not secured. [2021] Refer to: Issue of receiving the price of gold and silver via credit cards.
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