Fatwa ID: 07861
Answered by: Maulana Ubaidur Rahman
Question:
I’m a Muslim in the UK, and have been using credit cards in the past to facilitate purchases. I have an outstanding balance across few cards and currently paying down the balance but there is a lot of interest.
I no longer use the cards for purchases and I’m focusing on clearing the balance.
I have come across several views on the use of credit cards , some scholars present that it is permissible while others present that it is forbidden and major sin.
My questions are;
1 -Could you please advise in clear terms if credit cards are outright forbidden.
2- If I want to reduce the interest that I’m having to pay this debt, would it be permissible to get a personal loan with lower interest to pay off the credit cards balance considering its sole purpose is to reduce the interest.
In the name of Allah, the Most Gracious, the Most Merciful
Answer:
If when paying back your outstanding balance, there are no additional charges on the basis of interest added to repayments from the bank or the company you are paying back to, then use of credit cards will be permissible.
If there is interest added, and you are having to return back an interest sum based on the delay of your paying them back, then it will be impermissible. This is due to engaging in acts of riba (interest). There is not a blanket yes or no rule on the use of credit cards as the terms of repayment do not always include impermissible elements such as interest. If you are paying back your sums of money that you have borrowed without interest, then this is permissible. In cases of utmost need and emergency, where there is no convenient or possible alternative, then use of credit cards will be permissible.
As to the second question, any loan involving riba is impermissible. This is even the case if it is used to alleviate another difficulty or greater loan. This is as in both cases, the use of interest would still be taking place. The intention may be a good one, but the action and the purpose of taking out the loan are not justifying enough. therefore, look for any alternative mechanisms and means to achieve the overlap objective which is to eliminate and deal with the first loan.
Only Allah knows best
Written by Maulana Ubaidur Rahman.
Checked and approved by Mufti Mohammed Tosir Miah.
Darul Ifta Birmingham.
[1]Raddul Muhtaar Hashiyya Ibn Abideen Lil Halbi, Page 169, Volume 5, Maktabatus Shaamila.
[1] وَالْأَصْلُ فِيهِ أَنَّ كُلَّ مَا كَانَ مُبَادَلَةَ مَالٍ بِمَالٍ يَبْطُلُ بِالشُّرُوطِ الْفَاسِدَةِ لَا مَا كَانَ مُبَادَلَةَ مَالٍ بِغَيْرِ مَالٍ أَوْ كَانَ مِنْ التَّبَرُّعَاتِ، لِأَنَّ الشُّرُوطَ الْفَاسِدَةَ مِنْ بَابِ الرِّبَا، وَهُوَ يَخْتَصُّ بِالْمُعَاوَضَةِ الْمَالِيَّةِ دُونَ غَيْرِهَا مِنْ الْمُعَاوَضَاتِ وَالتَّبَرُّعَاتِ، لِأَنَّ الرِّبَا هُوَ الْفَضْلُ الْخَالِي عَنْ الْعِوَضِ، وَحَقِيقَةُ الشُّرُوطِ الْفَاسِدَةِ هِيَ زِيَادَةُ مَا لَا يَقْتَضِيهِ الْعَقْدُ وَلَا يُلَائِمُهُ فَيَكُونُ فِيهِ فَضْلٌ خَالٍ عَنْ الْعِوَضِ وَهُوَ الرِّبَا بِعَيْنِهِ اهـ مُلَخَّصًا
