Using credit cards is haraam even if you pay up within the time limit
Q. I heard that using credit cards is haraam, but if I am sure that I am going to pay the bank within the time limit, so the bank will not charge any interest, is this also regarded as haraam?.
A. Praise be to Allaah.
What you have heard about credit cards being haraam is correct. That has already been discussed in question no. (13735)
Using them is haraam even if the user is certain that he will pay the bank within the time limit.
It has already been explained in the answer to the question mentioned that they are haraam because the bank lends money to the user in return for interest, and this interest is the price of the annual subscription to the credit card, as well as other interest charges which are to be paid to the bank if the user is late in paying.
The cost of the card is a kind of riba which the user pays to the bank, and this riba is paid by the user whether he pays on time or not.
Also, the user enters into a contract with the bank which means that he is obliged to pay interest if he delays payment. This is also haraam, because it is not permissible for a Muslim to commit himself to doing something that Allaah has forbidden.
The user may think that he can pay up on time, but then something happens to him that prevents him from doing so, so he pays riba to the bank.
Shaykh Ibn …Uthaymeen (may Allaah have mercy on him) said concerning this kind of contract:
A contract of this type is not permissible, because it involves riba which is the price of the card, and it also means committing to pay interest if payment is delayed.
In another fatwa he said:
This transaction is haraam, because the one who enters into it commits himself to paying riba if he does not pay on time. This is an invalid commitment, even if he believes or thinks it most likely that he will pay it before the time is up, because circumstances may change and he may not be able to pay it off. This is a matter that is in the future, and no one knows what will happen to him in the future. So dealings of this type are haraam.
And Allaah knows best.