Is it permissible to use credit cards to purchase goods and then pay the amount in monthly installments with interest reaching 3%?

Using credit cards to purchase goods and pay for them in installments is considered a loan from the bank to the cardholder. The issuing entity is not permitted to take more than the amount the cardholder used to purchase, and it is allowed to take a fixed amount for administrative expenses, without any increase tied to the amount used.

However, imposing a percentage on the amount used is prohibited usury (riba), whether it is for deferring payment or under the name of a service fee.

The International Islamic Fiqh Academy has decided the following: 1. It is impermissible to issue or deal with an uncovered credit card if it stipulates a usurious interest increase. 2. It is permissible to issue an uncovered card if it does not include a condition for a usurious increase on the principal amount of the debt. It is also permissible to take a fixed fee for issuance or renewal, and to take a commission from the merchant, provided that their sale with the card is at the same price as cash. 3. Cash withdrawal from the card is permissible if it does not result in a usurious increase, and fixed fees that are not linked to the amount or duration are not considered riba. 4. It is impermissible to purchase gold, silver, and currencies with an uncovered card.