Dear Shaykh! My younger brother has become very religious. We went for a meal at a restaurant and I offered to pay but he refused when he saw me paying with my credit card. He said that the food he has eaten shouldn’t be on credit. I explained that it will be paid for at the end of the month from my account; he went on to say that his meal will have long left his system by that time and that he doesn’t eat food that hasn’t been paid for? Is my younger brother technically correct? Please help.

ANSWER

It gives me pleasure to see young men showing so many signs of piety, Al Hamdu Lillaah. But, I would like to stress that credit cards are a very convenient method of making purchases without carrying cash.

This convenience has caused their creation, and almost everyone has one, (So do I)! The banks tell me that the way a normal credit card works is that you make purchases using your card and the bank issuing the card will pay on your behalf to the merchant providing you with the product or service. The bank deducts a certain percentage (2.5% normally) from the vendor in return for processing the transaction and adding the money to the merchant’s account.

From the customer’s side (the card holder), he is given a loan for that amount and given a grace period (normally 26 days to a month) to repay the amount interest free. If the card holder decides he does not want to pay the full amount, he pays the minimum (printed on the monthly statement), and the rest of the unpaid balance gets deferred in the form of a loan with compound interest. For a Muslim extreme care must be taken not to be late in paying the statement balance in full, so as not to incur interest, because incurring interest will then be Riba’ and Riba’ which means increase or excess is a loan with the condition that the borrower will return to the lender more than and better than the quantity borrowed and this is Haraam.

(VERILY, ALLAH TAA’LA IS ALL-KNOWING!)