1) Is using a credit card permissible if by the end of each month the balance is paid in full and no interest is paid at all?
2) Is it permissible to pay for products and services with a credit card when there is a surcharge (1% etc which varies from company to company) for paying through credit card? For Instance, the sale price for the good is $100 but for paying through credit card we need to pay $110 if the surcharge is 1%.
Answer:
In the Name of Allah, the Most Gracious, the Most Merciful.
1) It is permissible to use a credit card provided that one is sure that he will be able to pay the bills on time, so that interest may not be imposed upon him. The best way of using these cards is to open an account wherefrom all the amounts owing are debited by the issuing company to avoid the possibility of default, and thereby the possibility of paying interest. (Contemporary Fatawa: pg.245)
Many banks nowadays offer Visa debit cards etc, which let the customer use his own money wherever credit card is accepted. If possible, one should get this type of card instead of a credit card.
2) It will be permissible to use a credit card (with the abovementioned condition) to make a purchase, even if one will be required to pay a surcharge for using a credit card. In such a case, the price of the item will be considered to be the original price plus the surcharge. In the example that you mentioned, the price of the item will be considered to be $110, not $100. And it is permissible for a seller to determine the selling price of an item taking into consideration various factors, including the method of payment.
Many banks nowadays offer Visa debit cards etc, which let the customer use his own money wherever credit card is accepted. If possible, one should get this type of card instead of a credit card.
2) It will be permissible to use a credit card (with the abovementioned condition) to make a purchase, even if one will be required to pay a surcharge for using a credit card. In such a case, the price of the item will be considered to be the original price plus the surcharge. In the example that you mentioned, the price of the item will be considered to be $110, not $100. And it is permissible for a seller to determine the selling price of an item taking into consideration various factors, including the method of payment.
And Allah knows best.
Mufti Faizal Riza
21/11/2011