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Is it still halal to use a credit card and agree to pay interest if late?

Answered as per Hanafi Fiqh by Darulifta-Deoband.com
I need to know about credit card usage. There is an agreement in case of late fees there is an interest. So it is possible for us to avoid interest. But my question is there is an agreement on interest payment which is haram and the credit card is not the necessity of life now. There are other alternatives of credit card like prepaid card which works same as credit card. People are going for credit card only to enjoy its offers and benefits like airport lounge access for free which can be arrange by paying cash if you do not have the card, so in other word now credit card is not the necessity but to enjoy the luxurious of this world and to save money on different items and airport lounges. Please tell me after go through the above details, is it still halal to use credit card, is still halal to agree to pay interest if you are late means you will pay as you agreed on it?

بسم الله الرحمن الرحيم

(Fatwa: 1256/B-317/TB=9/1434)

The condition of credit card in which interest is levied is unlawful. If there is no interest i.e. it is only to reach free of cost to airport lounge then it shall be like a pass and there will be no harm. And now when the prepaid card is available which works like credit card it is unnecessary to question about the permissibility of the credit card. In case of late fees paying interest is unlawful, though you have agreed on paying interest. Any haram work shall not turn lawful after agreement.

Allah knows Best!

Darul Ifta,
Darul Uloom Deoband

This answer was collected from the official ifta website of Darul Uloom Deoband in India.

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