Question:

Is it permissible for the trade of gold to be done using a credit card?

Answer:

Alhamdulillah, praise and gratitude to Allah SWT for His countless blessings for us all. Praise and salutations to our beloved Prophet Muhammad PBUH, his family, companions, and all those who follow his footsteps until the Final day.

A credit card according to Bank Negara Malaysia is defined as refers to a set payment instrument provided by the card provider and when any total credit used by the cardholder isn’t settled or paid fully on or before the set date, then the unsettled sum will be charged interest, profit or other charges. [1]

According to Resolution No. 63 (1/7) in the Majma’ Fiqh al-Islami al-Duwali Conference, a credit card is defined as a document given by the card provider (bank) to an individual or entity (cardholder) with a binding contract among them which enables the cardholder to buy items or service from a buyer that approve the card without having to make an instant payment for the guarantee of payment made by the card provider. The payment is made through the account of the card provider (bank), where afterwards it will be charged to the cardholder after a certain set amount of time. Some card provider charges an interest (usury) on the outstanding balance after a certain period from the date (the debt) claimed while some providers do not charge any interest rate. [2]

Gold is a ribawi item that is obligatory for us to be cautious in its trade as stated in a hadith narrated from ‘Ubadah bin al-Somit RA, where the Prophet Muhammad PBUH said:

الذَّهَبُ بالذَّهَبِ، والْفِضَّةُ بالفِضَّةِ، والْبُرُّ بالبُرِّ، والشَّعِيرُ بالشَّعِيرِ، والتَّمْرُ بالتَّمْرِ، والْمِلْحُ بالمِلْحِ، مِثْلًا بمِثْلٍ، سَواءً بسَواءٍ، يَدًا بيَدٍ، فإذا اخْتَلَفَتْ هذِه الأصْنافُ، فَبِيعُوا كيفَ شِئْتُمْ، إذا كانَ يَدًا بيَدٍ

“Gold is to be paid for with gold, silver with silver, wheat with wheat, barley with barley, dates with dates, and salt with salt, the same quantity for the same quantity and equal for equal, hand to hand (i.e. payment being made on the spot). If these classes differ, sell as you wish as long as payment is made on the spot.” [3]

In the 12^th Session of Majma ‘al-Fiqh al-Islami al-Duwali Conference held in Riyadh (Saudi Arabia) on 25^th Jamadil Akhir – 1^st Rejab 1421H (23-28/9/2000), Resolution No.108 (2/ 12) regarding “Credit Card”, they decided on four resolutions on the use of credit cards, among the four resolutions are:

“It is impermissible to use a credit card in the trade of gold, silver and cash.” [4]

According to the above question, in our opinion, it is impermissible to buy gold using a credit card. The reason is gold cannot be bought using a delayed form of payment where the buyer doesn’t have money and the gold is received on the spot. It is different if it is paid in cash or using a debit card for it is paid instantaneously.

Once again, we’d like to state in the purchase of gold, it is included as a ribawi item. Two important matters in the trade of ribawi items are that it must be yadan bi yadin (from one hand to another hand) and it must be in the form of cash, instant and the handover is immediate and not postponed.

So, when a buyer buys gold with his credit card, it is a possibility that there is no money in the card and the transaction is delayed for a certain unknown period. What about the commitment in this matter? Thus, we truly emphasize the following in the purchase ribawi items such as gold and silver:

• Cash purchase
• Direct purchase from one hand to another
• Perform the akad of ‘I sell’, ‘I buy’
• Hissi (direct) qabadh (handover)
• Hukmi (by proxy) qabadh (handover)

We also suggest considering the opinions of experts in this matter. However, it is best to choose the ihtiyat (careful) opinion to ensure a calm heart and no doubts. This approach is actually an explanation for every individual to leave all that is doubtful in life and choose certainty that is calming. This is in line with a hadith narrated by al-Hasan bin ‘Ali R.Anhuma, where Rasullullah PBUH said:

دَعْ مَا يَرِيبُكَ إِلَى مَا لاَ يَرِيبُكَ فَإِنَّ الصِّدْقَ طُمَأْنِينَةٌ وَإِنَّ الْكَذِبَ رِيبَةٌ

“Leave what causes you doubt and turn to what does not cause you doubt. Truth is tranquillity, but falsehood is doubt.” [5]

Lastly, may Allah SWT give us all the correct understanding in practising this religion. Amin.

Wallahu a’lam.

[1] See: https://www.bnm.gov.my/documents/20124/938039/Kad+Kredit.pdf, pg. 2

[2] See: https://iifa-aifi.org/ar/2055.html

[3] Narrated by Muslim (1587)

[4] See https://iifa-aifi.org/ar/2055.html

[5] Narrated by Al-Tirmizi (2518)