Why does this matter?

Today you can buy almost anything and pay later: a phone, a sofa, a flight, even a meal. Many Muslims are not sure which kinds are halal.

Start with the good news. Buying now and paying later is halal in itself. Nabi ﷺ bought food from a Jewish man and paid later. He left his iron armor with him as a guarantee¹. Allah tells us to write down a debt that will be paid later². So debt is a normal part of life.

Two things make credit dangerous:

• Riba (interest). Allah has made trade halal, and made riba haram³. Nabi ﷺ cursed the person who takes riba, the person who pays it, the person who writes it down and its two witnesses. He said: they are all the same⁴. So paying interest is a sin too. The full rules are in What riba is.
• The weight of debt. Nabi ﷺ often asked Allah to protect him from debt. When asked why, he said: a person in debt speaks and lies, and promises and breaks his promise⁵. How to pay debts and lend kindly is in Debt and lending.

How can you tell if it is riba?

For any way of paying later, ask yourself: will I pay more because I took more time?

• If the price is fixed at the start and does not grow the longer you take, it is a normal sale where you pay later. That is allowed.
• If you borrow money and must pay back more than you borrowed, or the amount grows with time, it is riba.

A seller may ask a higher price if you pay in parts than if you pay cash. All four schools allow this, as long as the price is agreed at the start and does not go up if you are late.

Can you use a credit card?

Each time you pay with a credit card, the bank lends you the money. If you pay the full bill by the due date, you pay no interest. If you pay only part of it, or pay late, the bank adds interest. So every card contract has a line about interest, even if you never pay a cent of it. That line is why scholars differ.

View 1: avoid credit cards

• When you sign, you agree to pay interest if you are ever late. Agreeing to riba is wrong, even if you plan to avoid it.
• Nabi ﷺ said: Muslims keep the terms they agree to, but not a term that makes something haram halal⁶. A promise to pay riba is not one a Muslim should make.
• Even careful people slip. They lose a job, fall ill, or forget a date.

View 2: allowed if you are careful and have a need

• Many scholars and fiqh councils today allow a card if you are sure you will pay the full bill every month. Then the interest line never comes into play. You are really using an interest-free loan.
• Many add: only when you have a need. For example, building a credit history in a place where you cannot rent a home without one, or booking travel, hotels or a rental car that will not take a debit card.

Real scholars hold both views. Not having a card is the safer path. Using one carefully is a view you may follow. Follow a scholar you trust, and do not call people on the other side sinful.

If you use a credit card

• Never leave a balance unpaid. All scholars agree on this. An unpaid balance means paying riba every month.
• Set up an automatic payment of the full bill, not the "minimum payment".
• Never take cash out with the card. Cash withdrawals usually charge interest straight away.
• Only spend money you already have, and keep the limit low.
• A fixed yearly fee is a fee for a service. Many scholars allow it, because it does not grow with time or with how much you borrow.

Can you keep cashback, points and rewards?

• On a debit or prepaid card: yes, that is fine. It is a gift or a discount, and there is no loan.
• On a credit card you pay in full: most scholars who allow the card also allow the rewards. Three reasons: the rewards mostly come from the fee the shop pays the card company, you get them without paying interest, and they go to you, the borrower, not to the lender.
• Some scholars are more careful. The reward only exists because of a loan, so they would rather you leave it or give it away.
• All scholars agree: a reward you only get if you pay interest is part of the riba deal. Leave it.

Rewards are made to get you to spend more. Allah praises those who, when they spend, are neither wasteful nor stingy, but take the middle way⁷.

Are debit cards and overdrafts okay?

Debit cards are fine. You spend money that is already yours. Prepaid cards work the same way. But watch out for the overdraft. Some accounts let you spend more than you have, and then charge interest. Turn it off if you can, or keep a little extra money in the account so you never use it. Bank accounts and savings are in Banks, savings and Islamic banks.

Is buy now pay later halal?

Buy now pay later (BNPL) splits a price into parts, like "pay in 4" over a few weeks. There are two very different kinds.

• No interest: you pay the same price, just in parts. This is a normal sale where you pay later, like Nabi ﷺ buying food and paying later⁸. Most scholars allow it. The BNPL company pays the shop a little less than the price. Some scholars look closely at that part. But most say your side, as the buyer, is a normal sale where you pay later.
• With interest: longer plans and checkout "finance" with a yearly interest rate or a monthly charge for time are riba. Avoid them. Watch out for "0% for 12 months" offers. If you have not paid in full by the end, they add all the interest from the start.

Late fees

• Some scholars allow a small, fixed late fee that covers real costs, or one that goes to charity. It is a push to pay on time, not a price for extra time.
• Others say any extra you are charged for being late is the old riba of "pay now or pay more". So avoid plans with late fees.
• All scholars agree: a fee that keeps growing the longer you are late is riba.

What everyone agrees on: only use BNPL if you are sure you can pay every part on time. Set reminders and keep the money aside.

The debt trap

Each part feels small, but five small plans add up to a real debt. Ask yourself: do I need this now? Could I pay for it today? How many plans do I already have? Allah says: do not keep your hand tied to your neck, and do not open it all the way, or you will end up blamed and full of regret⁹. See Barakah: why money never lasts.

What about student loans?

Learning is a great good, and many jobs need a degree. But many student loans charge interest. Scholars differ:

• Most scholars: it is still riba, so avoid it. Study is good, but it is not usually life or death. Look hard for other ways.
• Some scholars and fiqh councils in the West allow it for a real need: you need the study to earn a living, and there is truly no other way. Some also look at loans that you only pay back as a share of your salary above a set level, and that are cancelled after some years. They say these work more like a tax than a normal loan.

Real scholars hold both views. Follow one you trust. A real need has limits: take only what you need, and only while the need lasts. See Doubtful things, need and mistakes.

Ways to study without interest: grants and scholarships (including from Muslim charities), interest-free or Islamic student finance where it exists, help from family, an employer who pays, working or studying part time, or a cheaper course that leads to the same job.

What about car loans, personal loans and payday loans?

• Car loans with interest are riba. Halal ways include saving up and buying a cheaper car, buying from a seller in parts at a fixed price, and Islamic car finance or leasing. See Leasing, rent-to-own and car finance.
• Personal loans with interest, for a wedding, a holiday or a new kitchen, are riba too. None of these needs debt. Nabi ﷺ said: being rich is not having many things. Real richness is a rich heart¹⁰.
• Payday loans lend a small amount until your next paycheck at a very high rate. If you are late, the loan rolls over and grows fast. It is riba and a trap at the same time. Stay away.

Short of money before payday? Try these first

• Ask family or a friend for a qard hasan (a kind loan with no interest). Write it down and pay it back on time¹¹.
• Ask your employer for an advance on your salary. That is your own money, just early.
• Ask the company you owe for more time or a payment plan.
• If you are truly in need, zakat may help you. People in debt are one of the eight groups it is for¹². See Who receives zakat, and ask your masjid.

Is a credit score haram?

In many countries a credit score shows how well you pay your bills. Landlords and phone companies check it. It is not haram in itself. It is a record of keeping your word, and Allah says: keep your promises, because you will be asked about them¹³.

• Pay every bill on time: rent, phone, electricity. In some countries these count toward your score.
• A credit card paid in full, if you follow the view that allows it.
• Some "credit builder" products charge interest, so check before you sign.

A slightly lower score is far better than riba. Check the options where you live, and talk to a qualified adviser if you need to.

Already in interest debt? How to get out

Many good Muslims are in interest debt. Some did not know. Some were pushed by hard times. Some slipped. Do not lose hope. Allah says: O My servants who have wronged themselves, do not lose hope in Allah's mercy. Allah forgives all sins¹⁴. About riba itself, He says: whoever stops after the warning comes to him, what is past is his, and his matter is with Allah¹⁵.

1. Turn back to Allah

Feel sorry, ask Allah to forgive you, take no new interest debt, and plan never to go back. If you slip, turn back to Him again. Nabi ﷺ said: every child of Adam makes mistakes, and the best of them are those who turn back to Allah¹⁶.

2. Keep paying

You must pay back what you borrowed. Usually you cannot stop the interest without breaking the law and hurting yourself. Many scholars say: pay what you are forced to pay. You ask forgiveness for entering the deal. Your job now is to get out as fast as you can, so you pay as little riba as possible.

3. Make a plan

• Write every debt down: who you owe, how much, and the interest rate.
• Pay the most expensive debt first, and the minimum on the rest. This cuts the riba fastest.
• Spend less and sell what you do not need.
• Talk to your lenders about hardship plans, and get free debt advice from a trusted non-profit service.
• Offers that move a debt to 0% interest often charge a fee for the move. Scholars differ on these, so ask first.
• See How to get out of debt as a Muslim.

4. Make dua, and trust Allah

• Nabi ﷺ used to say: O Allah, I ask You to protect me from worry and sadness, from weakness and laziness, from being a coward and being stingy, from being crushed by debt and from being overpowered by people¹⁷.
• Ali taught a man in debt a dua from Nabi ﷺ. He said that even with a debt as big as a mountain, Allah would pay it: Allahumma-kfini bi halalika an haramik, wa aghnini bi fadlika amman siwak. It means: O Allah, let Your halal be enough for me, so I do not need Your haram. And by Your kindness, let me need no one but You¹⁸. More on our Duas page.
• Whoever takes people's money wanting to pay it back, Allah will pay it for him. Whoever takes it wanting to waste it, Allah will ruin him¹⁹.
• Allah is with the person in debt until he pays it off, as long as the debt was not for something Allah dislikes²⁰.
• Whoever fears Allah, He will make a way out for him, and give to him from where he does not expect²¹.

Common questions

I always pay my card in full, but one month I forgot and was charged interest. Have I sinned?

An honest mistake is not a sin. Allah has forgiven this ummah for mistakes and forgetting²⁷. Pay it at once, set up an automatic full payment, and ask Allah to forgive you. If it keeps happening, think about giving up the card.

I cannot rent an apartment without a credit history. What can I do?

Pay rent and bills on time, and ask about interest-free ways to build a record in your country. Many scholars allow a credit card for this need if you always pay in full. Others say avoid it. Follow a scholar you trust.

My phone comes on a monthly plan that costs more in total than buying it outright. Is that riba?

If the seller sells you the phone at a fixed total that you pay monthly, it is a normal sale where you pay later. A higher price for paying later is allowed. If the plan is a separate loan with an interest rate, it is riba. Check who you are paying, and whether there is an interest rate.

Can I use pay in 4 for my weekly groceries?

With no interest, and paid on time, most scholars allow it. But needing credit for food is a sign of real hardship. Talk to your masjid. You may be someone zakat is meant for²⁸.

My company gives me a credit card for work, and the company pays the bill.

The debt belongs to the company, and you only spend for your job. Many scholars see no problem in using it for work. Do not use it for yourself.

Can I keep the cashback from my credit card?

On a card you pay in full, most scholars who allow the card allow the cashback. Some would rather you leave it or give it away. A reward you only get because you paid interest should be left.