Are credit cards and bank interest (riba) haram?

Question

Are credit cards and bank interest (riba) haram?

Bottom Line

Riba (interest) is strictly haram in Islam. Credit cards themselves are not haram, but using them in a way that involves paying interest makes it haram.

Quick Answer

Bank interest (riba) is explicitly forbidden in the Qur’an and Sunnah. Credit cards are permissible if used responsibly — paying bills on time without incurring interest. However, if one signs a contract agreeing to interest and actually pays it, then it becomes haram. The safest option is to use Islamic (shariah-compliant) credit cards or debit cards.

Key Points

• Riba (interest) is haram by clear Qur’anic prohibition.
• Having a credit card is not haram in itself.
• Paying interest on late payments or loans is haram.
• Using a credit card without falling into debt is permissible.
• Islamic credit cards (without interest) are safer.

Detailed Answer

Allah says: “Allah has permitted trade and forbidden riba” (Qur’an 2:275). The prohibition of interest is among the strongest in Islam, as it causes exploitation and injustice.

Credit cards operate by lending money to the user, with conditions for repayment. If the user pays within the due date, no interest is charged. In this case, the usage is not haram. However, if interest is applied for late or partial payments, this is clearly riba and sinful.

The Prophet (peace be upon him) cursed the one who consumes riba, the one who pays it, the one who writes the contract, and the witnesses to it (Sahih Muslim, 1598). This shows that even agreeing to a contract involving interest is dangerous, though scholars differ on whether it is allowed if you never actually pay interest.

Modern Islamic banks provide shariah-compliant credit cards that avoid interest, usually through fees or permissible alternatives. These are the safer options.

What This Means for You

Using a standard credit card only if you pay on time (avoiding interest) is permissible according to many scholars. If you pay interest, it becomes haram. The best option is to use an Islamic credit card or a debit card.

And Allah knows best

References

Primary Sources

• Qur’an 2:275
• Qur’an 2:278 279
• Sahih Muslim 1598

Secondary Sources

• Ibn Qudamah, al-Mughni (6/436) on the prohibition of interest contracts.
• Standing Committee for Fatwa (al-Lajnah al-Dā’imah, Vol. 13 p. 354): ruling that conventional credit cards involving interest are haram.
• European Council for Fatwa and Research: permits using credit cards if interest is avoided completely.