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Bought items with credit card – then the interest-free grace period ended

Published: 24/08/2011 10:31:00 AM GMT
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A man bought various items such as clothes, household tools, etc. using a credit card, intending to repay the amount before the interest was applied to the loan. His circumstances changed and he was unable to repay the amount in time and has now incurred interest on the credit card. What should he do now with the items he has bought via this method? The items are used and cannot be returned to the sellers. Should he give the items away in charity?

Answered by

the Fatwa Department Research Committee - chaired by Sheikh `Abd al-Wahhâb al-Turayrî

The items purchased with the credit card are lawful, since it is lawful to borrow money and it is lawful to make purchases. He may keep the items without any problem.

The sin is only in the interest payments themselves.

Yes, the Prophet (peace be upon him) said: "Allah curses the one who consumes interest, the one who pays it, the one who draws up the contract, and the witnesses to the contract, then he said they are same (in sinfulness)." [Sahîh Muslim]

This hadîth shows us that it is unlawful in Islamic Law to receive interest and to pay it. Both parties share in the sin of the transaction of interest.

However, there is an extremely important distinction to be made between the person paying interest and person receiving it. This distinction is that unlawful wealth is only accumulated by the party that receives the interest. The one who pays the interest shares in the sin of the transaction, but he is not stuck with any unlawful wealth as a consequence of it.

When a person borrows money on interest, that person is not receiving unlawful income, but is engaging in a transaction with an unlawful condition.

The reason why the borrower who takes out an interest loan does not receive any unlawful money is that receiving a loan in and of itself is lawful. What is unlawful and sinful is his agreeing to the unlawful condition of paying back the loan with interest.

When the person pays the interest, the recipient of the interest – the lender – receives unlawful money. The party who pays the interest shares in the sin for the interest transaction, but he does not acquire unlawful income as a consequence.

Consequently, the goods that have been purchased with the credit card are lawful to the purchaser. The purchaser should now make it a priority to pay off the debt as soon as possible and minimize the total amount of interest that must ultimately be paid.

And Allah knows best.

Source: Islam Today

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