The role of credit cards and debit cards in Islam!

Source: the Fatwa Department Research Committee - chaired by Sheikh `Abd al-Wahhâb al-Turayrî.

You should preferably use a debit card, if available, instead of a credit card. In this way, you can avoid altogether the possibility of having to make an interest payment.

A debit card is a card connected with an account into which you deposit money. You can then use the card to make your purchases. You can only purchase with the amount of money that you have deposited. You will not be able to make purchases in excess of that amount.

A debit card is lawful. The only problem is the possibility that some companies might pay you interest if you leave a credit balance in the account. In this case, it would be unlawful to receive that interest. If you had to use such a card that pays interest, you would have to make sure to deposit in the account only what you presently intend to spend and not to leave money in the account to accrue interest. To learn about the details of any particular debit card, you need to enquire with the issuing company.

A credit card is where the issuing company extends to you a line of credit. When you make purchases with the card, the issuing company pays the seller on your behalf. Then you are liable to pay that amount back to the company as a debt. Such credit cards generally charge interest on the loan, and dealing in interest is unlawful.

However, having a credit card is often necessary today for making purchases online, reserving hotel rooms, and a number of other everyday transactions. If a debit card is unavailable and you need to have a credit card for business reasons, then you may do so provided that you do not get involved in interest.

One way to do this is to deposit money in your credit card account before you make a purchase. In this way, you are using the credit card as if it were a debit card.

Many credit cards give their users an interest-free grace period in which to pay. If this is the case, then it will be alright to use the card n this way when absolutely necessary as long as you make sure that you pay it off in time so you will not be charged any interest.

Ramsha Amir.