Is It Permissible to Buy Gold or Silver Using a Credit Card?

Answered by Shaykh Muhammad Carr

Question

Is it permissible to purchase gold or silver from a physical shop using a credit card (such as Visa or Mastercard), considering that the actual transfer of payment is delayed due to the nature of credit card transactions?

Answer

In the Name of Allah, the Most Merciful and Compassionate.

Thank you for your question. May Allah reward you for ensuring that your income is permissible.

It is permissible to purchase gold or silver from a physical shop using a credit card.

Payment made with these cards constitutes valid possession because the amount is recorded in favor of the merchant at the moment the card is used. Delays in financial settlement (at the interbank level) or the issuance of a grace period by the issuer to the cardholder for repayment do not affect this ruling. [AAOIFI]

Buying and Selling Gold

The Prophet (Allah bless him and give him peace) said: “Gold for gold, silver for silver, wheat for wheat, barley for barley, dates for dates, and salt for salt – like for like, equal for equal, and hand-to-hand; if the commodities differ, then you may sell as you wish, provided that the exchange is hand-to-hand.” [Muslim; Tirmidhi]

Thus, if gold is exchanged for silver (or another currency), their amounts may differ, but the following conditions are obligatory: (a) that the exchange be immediate; (b) that the properties exchanged must be in the respective possession of the buyer and seller before they part company. [Misri, ‘Umdat Al-Salik]

When the buyer pays via credit card, the seller is deemed to have taken constructive possession of the price despite the delayed reflection of the price in his account due to a common affliction (umum al-balwa).

You may also benefit from Mufti Taqi’s assessment supporting the permissibility of deferred payment. According to Mufti Taqi, “As for the exchange of disparate currencies, like the Pakistani Rupee for Saudi Riyals, based on an analogy of the opinion of Imam Muhammad (Allah have mercy on him), deferment is permitted therein as well. This is because paper money (which is a constructed form of currency), if it were sold for a different currency, such as silver coins (dirhams), it is permissible for the transaction to involve both the exchange of different quantities as well as deferment in taking possession, on condition that possession of one of the two commodities is taken at the time of finalising the exchange.” [Uthmani, Fiqh al-Buyu‘]

And Allah knows best.

[Shaykh] Muhammad Carr
Checked and Approved by Shaykh Faraz Rabbani

Shaykh Muhammad Carr has dedicated his life to studying and transmitting our beautiful deen. His studies have taken him around the globe, where he has benefitted from the guidance of many luminaries. Under the guidance of his teachers – Shaykh Taha Karan, Shaykh Yaseen Abbas, Shaykh Muadh Ali, and many others – Shaykh Muhammad has grown to appreciate the beauty and benefits of diverse scholarship. He completed his memorization of the Qur’an at Dar al-Ulum Zakariyyah in September 1997 and received an Alimiyya Degree in 2006 from DUAI (Darul Ulum al-Arabiyyah al-Islamiyyah). He is also affiliated with Masjid Auwal in Bo Kaap, Cape Town (the oldest mosque in South Africa), where he serves as a co-imam, and Dar Al-Safa, where he has taught since 2018. As a teacher, he imparts the wisdom of our heritage and tradition by opening the door to students. As an imam, he has the unique opportunity to serve his community in daily life.

In addition to his roles as a teacher and imam, Shaykh Muhammad Carr has contributed significantly to the administrative and advisory aspects of Islamic institutions. Since 2023, he has served as the Administrative Director at The Imam Kurani Institute, contributing to the institution’s growth and development. He continues to pursue traditional Islamic Sciences, possessing a keen interest in Islamic Contract Law and Finance. Shaykh Muhammad has been a Shari‘a Board Member for Islamic Asset Management & Insurance Companies since 2001, aligning financial practices with Islamic principles.