What is the verdict on using credit cards in the US? I know there is interest involved on those cards, but is it OK to still use them in a way that does not incur interest by making regular monthly payments. I ask this because credit cards help build the credit history in the US which become really important to do a lot of things simplest of which can be even renting an apartment. Not having credit card at all would mean lower credit history. I will appreciate your response on this. Also, some companies do not have interest like American Express where you have to pay all your expensed amount every month. But they still have late payment fees which they say is either $35 or 2.00% of the payment amount which ever is higher. Is this another form of interest?
Answer
(Fatwa: 1926/D=416/K=1431)
(1) Using credit card is lawful on condition that the payment of issued bills is made within the fixed period without levying any interest; because it is haram to pay interest.
(2) In case of delay the two percentage which one has to pay as penalty is interest and thus unlawful. If the whole amount is paid and each month without delay, the credit cards of these companies may be used.
Allah (Subhana Wa Ta’ala) knows Best
Darul Ifta,
Darul Uloom Deoband