Short answer
Using a credit card is allowed in the mainstream Hanafi view if you pay the full balance before any interest is charged, every month. Carrying a balance, paying interest or taking a cash advance is haram. A debit card avoids the problem entirely, so it is the safer choice when it does the job.
Paying interest on a card is haram, and signing an agreement that contains an interest clause is disliked. Many Hanafi muftis permit a credit card for a real need, such as building a credit history, booking hotels or car rentals, or protection when shopping online, when you are sure you will always pay in full.
The four schools agree on this.
Explanation
When you pay by credit card, the card company pays the shop and you owe the card company. If you clear the statement within the grace period, no interest is charged, so in practice it is an interest-free loan. The agreement still says interest will apply if you pay late, and that is why muftis allow it only for people who are certain they will never trigger that clause.
Conditions for using one:
- Pay the full statement balance every month. Set up automatic full payment.
- Never take a cash advance; interest on it starts at once.
- Avoid late fees, which are an increase on a debt. See Are late fees haram?
- If you know you overspend on credit, do not keep a card.
In the US, a credit history affects renting a home, getting a phone plan and sometimes a job, and many muftis count building one as a valid need. Points and cashback earned on purchases are treated by many Hanafi muftis as a permitted incentive, since they come from spending, not from borrowing. A reward that depends on carrying a balance or paying interest is not.
If you are already paying card interest, make clearing the balance a priority, cut the card up if it keeps pulling you back, and repent. The Prophet ﷺ often sought Allah's protection from sin and from debt. This is a contemporary question, and scholars of the four schools generally apply the same conditions.
The evidence
Quran, Surah Al-Baqara 2:278
يَٰٓأَيُّهَا ٱلَّذِينَ ءَامَنُوا۟ ٱتَّقُوا۟ ٱللَّهَ وَذَرُوا۟ مَا بَقِىَ مِنَ ٱلرِّبَوٰٓا۟ إِن كُنتُم مُّؤْمِنِينَ ﴿٢٧٨﴾
O you who have believed, fear Allah and give up what remains [due to you] of interest, if you should be believers.
Interest must be avoided completely, so the card must never be used in a way that incurs it.
Sahih al-Bukhari 832
Sahih... اللهم إني أعوذ بك من المأثم والمغرم ...
"O Allah, I seek refuge in You from sin and from heavy debt."
Debt is something a Muslim should avoid falling into.
Sahih Muslim 1598
Sahih... آكل الربا وموكله وكاتبه وشاهديه ...
"He cursed the one who consumes riba, the one who pays it, the one who writes it and its witnesses."
Paying card interest is paying riba.
Where the ruling is recorded
- AAOIFI Shari'ah Standards, Standard on debit, charge and credit cards. Permits cards where no interest is incurred and sets conditions on fees.
- Radd al-Muhtar (Ibn Abidin), Kitab al-Buyu', Bab al-Riba. The ban on any stipulated increase on a debt.
This answer is pending review by the scholars on our team. Quran translation by Sahih International. Hadith Arabic from the standard editions of the six books and the Muwatta, with gradings as recorded there; the English is our own rendering. Spotted a mistake? Tell us.