Are Credit Cards Haram or Halal?

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Yes, Credit cards are haram as the bank charges interest on the money lent to the user. This interest includes the annual subscription fee and other charges that must be paid even if the user pays on time. It is considered riba and is prohibited in Islam. The user is also obligated to pay interest if they delay payment, which is also haram.

Are credit cards haram? It’s no secret that credit cards can be tempting. After all, they offer a quick and easy way to borrow money. But what many people don’t realize is that credit cards can also be dangerous. So what’s the verdict? Are credit cards haram? The answer isn’t necessarily clear-cut. Make sure to read till the end so you know the answer to this query.

What is Haram?

Haram finance is a type of financial activity that is considered to be against the teachings of Islam. This can include activities such as charging interest on loans, investing in businesses that are considered to be morally questionable, or speculate on the future price of commodities. While there is some debate on what exactly constitutes haram finance, the general consensus is that it is any activity that is considered to be harmful to the individual or to society as a whole.

Haram finance is a growing concern in the Muslim world, as more and more people are becoming aware of the potential risks involved in participating in such activities. In addition to the moral concerns, there are also financial risks associated with haram finance. For example, investing in a business that is engaged in activities that are considered to be haram can lead to the loss of money if the business is unsuccessful.

There are a number of Islamic financial institutions that have been established in recent years in an effort to provide alternatives to traditional banking products and services. These institutions offer products and services that are in line with the teachings of Islam, and as a result, they are able to avoid the risks associated with haram finance.

Islamic financial institutions offer a number of different products and services, including savings accounts, mortgages, and investment products. These products and services are designed to help Muslims save money, buy homes, and invest in a variety of different businesses. In addition to providing financial services, these institutions also offer educational resources and advice to help Muslims make informed decisions about their finances.

The growth of Islamic finance has been driven by a number of factors, including the increasing global Muslim population, the desire for alternatives to traditional banking products and services, and the increasing awareness of the risks associated with haram finance. Islamic finance is a rapidly growing industry, and it is expected to continue to grow in the coming years.

What are credit cards?

A credit card is a type of payment card that allows the cardholder to borrow funds from the issuer, typically a bank or financial institution, up to a certain limit in order to make purchases or withdraw cash. These borrowed funds are then required to be paid back by the cardholder, along with any interest that may have accrued. Credit cards are a form of revolving credit, which means that the cardholder can make charges up to a certain limit, and as they pay off their balance, the limit becomes available again.

Credit cards can be used to make purchases at merchants that accept them, both in-store and online. They can also be used to withdraw cash from ATMs. When a purchase is made, the cardholder is required to make at least a minimum payment each month to the issuer, which is typically a percentage of the total balance. If the cardholder does not make the minimum payment by the due date, they may be charged a late fee.

There are various types of credit cards available, each with different features, benefits, and terms. Some credit cards are designed for individuals with good credit, while others are intended for those with poor credit or no credit. Additionally, some credit cards offer rewards, such as cash back or points, for making purchases with the card. These rewards can be redeemed for merchandise, travel, or statement credits.

While credit cards can be a convenient and useful financial tool, it is important for cardholders to be responsible with their use and to make sure they fully understand the terms and conditions of the card. Misuse of credit cards can lead to high levels of debt and negatively impact one’s credit score.

How do Credit Cards Work?

Just about everyone has a credit card these days. They’re useful for everything from everyday purchases to emergency expenses. But how do they work, exactly?

Credit cards are essentially loans that you can use to make purchases. When you use a credit card, you’re borrowing money from the card issuer. You’ll need to repay that money, plus interest and fees, over time.

The credit limit is the maximum amount you’re allowed to borrow. This is set by the card issuer based on factors like your credit history and income. Your credit utilization ratio – which is the amount of credit you’re using compared to your credit limit – can impact your credit score. So it’s important to keep your credit utilization low.

Making timely payments is also important. Payment history is one of the most important factors in your credit score. So if you’re consistently making late payments, that can hurt your score.

If you’re able to use credit responsibly, it can be a helpful tool. But it’s important to understand how credit cards work before you start using them. That way, you can avoid getting into debt and damaging your credit score.

Are Credit Cards Haram?

There is a lot of debate surrounding the question of whether credit cards are haram or not. While there are some who believe that credit cards are permitted, there are others who believe that they are not.

The main reason why credit cards may be considered haram is because of the interest that is charged on them. In Islam, it is not permissible to charge or pay interest, and credit cards typically have high interest rates. This means that if you are carrying a balance on your credit card, you could end up paying a lot of money in interest.

Another reason why credit cards could be considered haram is because of the temptation to spend more money than you can afford. Credit cards make it very easy to spend money, and if you are not careful, you can end up getting into debt. This can lead to financial difficulties and stress, which is something that Islam prohibits.

So, while there are some valid reasons why credit cards may be considered haram, it is ultimately up to each individual to decide whether or not they want to use them. If you are concerned about the possibility of paying interest or getting into debt, then you may want to avoid using credit cards. However, if you are confident that you can use them responsibly, then there is no reason why you cannot enjoy the benefits that they offer.

Source Reference – The above information is verified via Islam Question and Answer.


Are there any Islamic credit cards available?

Yes, there are Islamic credit cards that are based on the principles of Islamic finance and are compliant with Shariah laws. These cards are structured to avoid interest and other prohibited practices.

What are the alternatives to credit cards for Muslims?

Alternatives to credit cards for Muslims include debit cards, prepaid cards, and Islamic personal loans. These options are structured to avoid interest and other prohibited practices. It is always recommended to consult with a reputable Islamic scholar or a financial advisor before obtaining a card or loan.

Can I use my credit card for donations or charity?

Yes, you can use your credit card for donations or charity as long as it is compliant with Islamic finance principles and you are able to pay off the balance in full and on time.


The bottom line is that while credit cards aren’t inherently haram, whether or not they’re permissible depends on your usage. If used responsibly without the occurrence of debt and in compliance with Islamic finance principles, they can be considered permissible. However, it is important to be aware of the potential pitfalls and to use them with caution.

It is also important to make sure that the credit card issuer and the usage of the card is compliant with Islamic finance principles. It is always recommended to consult with a reputable Islamic scholar or a financial advisor before obtaining a credit card. In my humble opinion, I believe it is best to avoid them altogether to eliminate any fears of partaking in a haram practice. It is always better to be safe than sorry. This way, one can avoid any potential financial issues and maintain peace of mind. Thanks for reading.

Also explore Is 401k Halal, Is Health Insurance Haram, Are Bonds Haram, Are Credit Cards Haram, Are NFTs Haram and many more at Halal Haram World.

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Written By Nazim Almasi

Nazim is an Islamic scholar, author and External Consultant at Renewable Energy Maldives. He writes on Islamic finance, food and halal dietary guidelines. He is a respected voice in the Muslim community, known for his clear explanations of complex religious concepts. He has been invited to speak at various conferences and seminars on topics related to Islamic finance, food and Renewable Energy.
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