Full Lecture Transcript (Cleaned)
The Question — 0:00
A person heard a fatwa that it is haram to have a credit card. Is it allowed to have one or not?
The Danger of Preconceived Notions — 0:20
When it comes to Islamic finance, I have discovered that many of us have already made up our minds before listening to any scholar. When someone comes with an opinion not in accord with what we already heard, instead of thinking and listening we immediately dismiss them. This is not the right way. Islamic finance is one of the most diverse and hotly contested areas. It is not black and white. Anyone who has never studied it but thinks he knows all the answers just shows that he hasn't actually studied it.
Riba Is Without Doubt Haram — 1:00
Giving somebody money as a loan and demanding more back is the essence of riba and is one of the seven major sins. There is no difference of opinion on this. The Quran and authentic hadith in Bukhari and Muslim are more than sufficient — we don't need the weak fabrications about "riba being worse than 72 acts of zina" or "worse than committing zina with your own mother." Ibn al-Jawzi declared many of these to be fabricated stories, and even logically they make no sense.
The Difference Between Giving and Receiving Riba — 2:00
Almost all of our modern scholars agree that giving a riba loan (charging interest) is not the same level of haram as taking a riba loan (paying interest). Both are haram. Both are sins. But the Quranic condemnation and the major-sin category apply primarily to category one — the lender. The borrower who has to pay is in the second category, which is still haram but of a lesser severity.
Why does this matter? In Sharia, when deciding at what level of difficulty a haram becomes permissible due to necessity, we look at two things: the level of haram and the level of difficulty. A scholar contextualizes these together. The bar for the borrower is not as high as it is for the lender.
The Core Concept of a Credit Card — 3:00
The concept of credit is halal by unanimous consensus. Suppose I am at a store and I have no cash. I say to a friend: can you pay for me, and I will pay you back tomorrow? This third-party credit arrangement is completely halal. The more trustworthy a person is, the more people will pay for him. This is just a natural human transaction.
The credit card company does exactly this: it says to the merchant, "We will pay you on behalf of this customer — we trust his credit score." The contract up to that point is completely halal.
Where does the problem come in? There is one clause in that entire multi-page contract that says: if you do not pay back within the 25 to 30 days, we will charge you interest. That is where the problem lies.
One Problematic Clause Does Not Void the Whole Contract — 4:00
This leads us to a famous controversy in fiqh: what happens when a contract is valid but one condition is invalid? This is known as the "faulty stipulation." The majority of the tab'iun and scholars said: you cannot invalidate the whole contract because of one clause. That one clause is invalid, and the rest of the contract stands.
This is explicitly proven in the hadith of Barira, where the Prophet allowed a contract to proceed and voided only one improper condition, not the entire agreement. So theoretically, if these contracts went before an Islamic sharia court, they would keep the contract and strike out only the one problematic clause.
The Unanimous Position of Scholarly Councils — 5:00
Given all of the above, the majority position from the Fiqh Council of North America, the Fiqh Council of Europe (AMJA), and virtually every major scholarly body is this: it is permissible to have a credit card for those who have a genuine need — not an open license for anyone.
Some people have very simple lives. They go to work, buy groceries, pay rent, and that's it. Debit cards, checks, and cash work fine for them. But other people — I am one of them — travel constantly and need to rent cars and book hotels. Almost all hotels require an actual credit card for prepayment. The amount of travel I do would not be possible without a credit card.
So not everyone is in the same situation. It is not an open green light — it is a yellow light. People have to honestly assess their own situation.
The Conditions — 6:00
For those who genuinely need it, the scholarly consensus requires three conditions:
The credit card companies want you to go into debt. They give you a limit of two thousand when you can only pay back one thousand. They want you to see something nice and charge it. We don't want that. Make a sincere, firm intention: I will never purchase more than what I can repay, and I will always pay on time.
For those who don't need a credit card: use debit cards, checks, or prepaid Visa/Amazon cards loaded with cash. For those who genuinely need one: with these conditions met, it is permissible.