Why I am Quitting Credit Cards

🙆🏻‍♂️ Our investment arm, Cur8 Capital - cur8.capital
This is not a video on whether or not credit cards are halal or haram (we've done that already), rather this video is going to tackle why I believe that credit card companies have a ton of blood on their hands, why I refuse to use them any longer and why you shouldn't too.
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About us
We're Ibrahim & Mohsin - ex-city lawyers and authors of "Halal Investing for Beginners". We've been studying investments and the traditional Islamic sciences for 13+ years. Over the year we've been published by the Financial Times, the World Economic Forum, Foreign Policy etc.
Today we run a sharia-compliant wealth management platform that manages over $35m in assets. We make videos about investment, personal finance, careers, and entrepreneurship.
We do this to make downtrodden communities better-off. To take people of colour, Muslims, and minorities from being among the poorest in society to the richest.
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Remember, with investing, your capital is at risk. This is not financial advice. If in doubt, always talk to a financial advisor.
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TIMESTAMPS
00:00 - What's going on?
01:10 - Who are we?
01:41 - How the credit card industry make money?
03:52 - How credit cards kill
06:03 - Why your reward points have blood on them
07:53 - Comparison sites are part of the problem
11:53 - What should you do?
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#creditcards #personalfinancetips #islamicpodcast #shariacompliant #personalfinance #creditcardsforbeginners #islamicfinance #ifg #unethical #haram #halal

[@callmeNeno]

Amazing content; never heard this perspective.

[@irg5124]

you're absolutely right ... and you hit all points. i could never understand why i benefitted from spending on my credit card - now i do

[@MrSULIKING]

Brilliant video!

[@zaydgajia3478]

Ironic since I just signed up with AMEX after being recommended to do so. Video came at the right time Alhamdulillah

[@AbdullahEl2]

Great video. If you wouldn’t use rewards cards (which I agree) then which types of cards would you use? Cash back maybe? JAK

[@TheKhalipha]

Use a debit card or look for a Charge Card; these are prepaid cards instead of post paid cards.

[@nayyerahmad8967]

Salaam, Informative video as always. Since COVID, many businesses are REQUIRED to take card payments. The card payment option I provide my customers cost me 2%+. When I go and spend electronically, that again would incur some kind of fee. Consider I received a £50 note in cash for my services, then I go onto spend that £50 in cash. That note can change hands 20 times and it would still be worth £50. However in electronic exchanges, after 20 transactions that £50 will be a fraction of its original value. The only people making a cut each time are the merchant banks.

[@lifehack-iy8nf]

hey ibrahim i have some question abt trading stocks Please tell us: is trading stocks in online halal? beside those criterias(abt type of stocks and leverage interst issue) i asked this question cuz, i listen some peoples says when we trade stocks in online platforms there is cfd issue so... how can i trade stocks online

[@study_traveluk2560]

Are credit card with zero interest halal? For example mono flex offer easy instalments no interest for three months, but then one has to sign the credit agreement at start? What's your opinion about that. Thanks

[@MJ-sg6ke]

Assalamualykum. It is inevitable that we all have to deal with companies who are vested in interest in some form. However, my opinion is that we should try our utmost to not interact with any potential business/company/system in which we may cause even a passive support through our usage to interest products E.g., if you can pay your bills in full with a debit card, dont use a credit card to pay it and just your funds. In that way, you are not using or supporting any company which deals with interest.

[@ShumonM]

Use a credit card as a debit card. only spend what you can afford to pay off in full at the end of the month. That's the only way to keep it halal too.

[@user-yf5je1dn1q]

It's not halal as there is a risk you will pay interest and you're signing up to this risk. If something out of your control happened (eg job layoff) and you could not afford your repayment, you would end up having to pay it. A Muslim wouldn't sign a contract agreeing to something that says if I can no longer uphold my agreement, I'll eat pork. So why would you sign an agreement that states you may have to pay riba? (A major sin)

[@ShumonM]

@@user-yf5je1dn1q I watched a long lecture on this exact topic by Dr Main Qudah. I’m gonna go with his guidance on this.

[@Fatimahjangana]

Assalamu Alaikum, may Allah bless you. Respectfully, it’s not the same. Psychology studies show that people spend way more when they are using other people’s money, which is essentially what you’re doing when using a CC. The plan to pay off every month works when everything goes as planned, not factoring in unexpected things happening in life. It’s sufficient to know that the US has over $1Trillion in CC debt, let alone the islamic component of it. It’s can be tough but Wishing you all the best.

[@TheKhalipha]

This is still not a foolproof method man. I avoid just staying away and using a debit card or some banks offer a Charge Card which is prepaid that you can use.

[@fishing-gardening-travelling]

I use a debit card. I've never used a credit card.

[@banzobeans]

What about fees merchants pay for every single transaction?

[@waqarahmedkhan1236]

I used 3 credit cards but now after watching this video I learn No cost emi is not actually what it supposed to be it’s also interest in some way or another. Thank Abrahim for great video I will Insha Allah will come out of this haram way of life. ❤

[@fishing-gardening-travelling]

Bro stop helping haraam credit card companies.

[@arba9145]

But aren't interest rates high now anyway?

[@youssifgamalkamilabdulsala8909]

How can you rent a car without a credit card? Any alternative available? As far as I know, it is always required or if you don't have one, you have to pay a ridiculously high fee.

[@Zeczam]

What are interchange fees?

[@Ironmannew]

Previously i used debit card for my online payment, but i faced mutliple issue. Once my card details got hacked and it was diffuclt to get my money back, So only online payment i use credit card which was zero cost liability feature

[@mbenlahrech]

If it is unethical it is haram no ?

[@ibraheem128]

Genuine question, what do you think about the money gained from a KZbin channel in which music is played?

[@IFGuru]

Genuine answer, I wouldn't know because we don't monetise.

[@agustindiaz9824]

There is something wrong here... how can you set apart "ethics" with "haram or halal", arent they the same? Meaning haram as unethical and halal as ethical. If credit cards are halal then they are ethical, and if Allah permitted them we shouldnt be forbidding them (if Allah actually permitted though)

[@bonboy410]

i just use a debit card

[@billyabbas]

Excellent Excellent Excellent video. Well put together and very understandable. Totally correct! Insha'Allah there will be an alternative.

[@jigglefloyd]

I would dump the credit cards as I have no true need for them and always pay them off each month and incur no interest, but like you said at the end, there's no alternative to 'building credit'. And if it's not a credit score we will have to worry about then it's a social score of some kind in our dystopian future. In the USA the big credit bureaus do look at non-credit card / mortgage based recurring payments when calculating your credit score such as utility bills, car lease payments, and rental agreements. But not having a credit card definitely lowers your potential score because the bureaus like to see a 'diversification' of credit sources. So it even helps to have different types of credit cards. Not having a good score means you either can't qualify to get a car lease, a rental agreement, or a "halal" mortgage, or you can get them at a much higher cost. If you're rich there's not nearly as much of a need for credit cards - so maybe your advice works well with other wealthy people who get no benefit from credit cards other than their rewards. But for the common person, which this channel usually doesn't cater to, it's just not practical.

[@f4zn0m97]

The system in UK as you know, unfortunately is such that if you don't have a credit card or loan, you don't have a credit history and hence you are forced out of the market for almost everything as you don't exist!!

[@akhat74]

Phone contracts count towards credit history

[@rakibalmahdi2401]

I broke my credit card with bare hands 5 years ago. Never used once since

[@selendioxid4784]

Also, just consider that every transaction is tracked, and those companies know everything about where and when you buy things. I try to pay as less as possible with cards. Mostly because of privacy.

[@mohammedbinhamza7612]

Where does the buck stop then? If we go upstream, we will end up blaming capitalism which is at the core of this rot. Take your iPhones and clothing labels for instance. Digging into tje supply chains of all these leads to a group that is being exploited in some way or form. The EV batteries, delivery companies also come to mind too. The socio-corporate responsibility is just a web page of eloquent words put together. Let's be real. There is no escaping unethical companies.

[@ali78610121012]

Lol yeah exactly

[@talhaali4202]

I agree. I feel like there is an element of false equivalency here. Equating rewards from a credit card to blood money is almost laughable. Surely then this would include the amount of people suffering from mortgage defaults, which means we should also avoid that for ethical reasons (ignoring the interest aspect ofc). Ibrahim is fine with mortgages however. These kinds of videos will also encourage Muslims to stop taking advantage of free money pushing them further behind.

[@KAHamid]

Another consideration might be to track your rewards (especially easy for cash rewards received) and donate them to a charity or give them to someone with genuine financial need. The system will still exploit the vulnerable but at least one can redirect the funds back this way. Hopefully!

[@MD-hx3wf]

I don’t understand.. (not from UK) but CC is debt and comes with interest so why would you have to use it as a Muslim in the UK. And lets say you do have to use it because of its format.. then there are ‘prepaid credit card’ which are actually debit cards with the format of a creditcard.. why would you use that instead ? Curious.

[@abydx]

The irony here is that most of the global Islamic index funds/ETF's have VISA as one of the top 10 holdings. How does that work?

[@azizurgoni]

Visa is debit card only I think that's why

[@Username-ht8wf]

I don't think you know what Visa Inc's business operations are, i think you are confusing it with the banks that offer credit lines.

[@abydx]

@@Username-ht8wf please let me know what their business is as I thought they issued the credit cards?

[@Username-ht8wf]

@@abydx they are a payments processing platform. They dont issue credit cards or extend credit. That is the banks that do that.

[@roy-kn7pi]

Whet do you think about the rewards cards in Islamic banks?

[@SherazH1]

Good for you sirjee

[@MohammedUL]

What is credit score and reward cards? As far as I'm concerned my bank takes a fee for me using the card from the business I pay and some money as a subscription to the card

[@shafx1987]

Whats an interchange fee? and why is it halal?

[@jackngo9338]

Just pay your shit on time.

[@abdool93]

Can't the same argument of Suicide, unethical earnings be made for conventional insurance ?

[@ambengfan]

Living in the most expensive country, one looks for rewards card just to save a few bucks which in turn does help to alleviate the pressure. In Singapore, everyone seem to have a credit card as the society is designed as such.

[@howtomakealmostanything3484]

Credit card "rewards" are not actually rewards. They are the tax that you have already paid on the products you buy which are higher by a few percent because of those "rewards". The rewards are already priced into the products you buy. So yes, I will keep using reward cards because I have already paid for products that are pricing in those rewards. As for the people who are being exploited by those companies - they should just stop wasting their time on useless things and spend some time to get financially literate. There is no excuse why in this dacade anyone should be illiterate about those topics when all the information is available at an instant - and not just in one form but in audio, video, and written form.

[@farhank8336]

I love credit cards. just dont pay interest on it! once you know how you system works. play game!!

[@user-yf5je1dn1q]

It's not halal as there is a risk you will pay interest and you're signing up to this risk. If something out of your control happened (eg job layoff) and you could not afford your repayment, you would end up having to pay it. A Muslim wouldn't sign a contract agreeing to something that says if I can no longer uphold my agreement, I'll eat pork. So why would you sign an agreement that states you may have to pay riba? (A major sin)

[@jimbojimbo6873]

The problem is the risk

[@farhank8336]

@@user-yf5je1dn1q Not really.. I apply over phone and when they ask you" agree to terms and condition: all you need to say is. I will give what i take. they approved credit. its all about words you use. secondly if you fear this. Dont do it.

[@Fatimahjangana]

Assalamu Alaikum May Allah bless you. Research shows that people spend more money when they use others’ money, which is what you do with a credit card. Everyone can play the “game” when life goes well, until unexpected things happen (and they always do). Debit cards have great features too, they’re slowly building in reward, protection, etc. May Allah keep us steadfast, avoiding all of this is better in my opinion.

[@arba9145]

Asalaamualaykum ❤!

[@azuz1698]

You said it’s ok to use credit card from an Islamic perspective? Can you please explain how it’s ok to agree to a card that charges interest. Even if you don’t default by virtue of you agreeing to paying the interest in case you default is in and of itself haram!

[@hasibulhasan235]

Assalamualaikum, I’m a student who is studying in USA. I tried to avoid credit card because of its ethics and impermissibility in Islam. But I needed build my credit score. That’s not because I want a loan but it’s really helps in different situations like renting my accommodation.I found that it is possible to build credit with a credit card with our Islamic principles and not harming others as IGU’s last KZbin video mentioned. I was wondering why IGU doesn’t implement the method and make a financial company to be the pioneer in UK like this. That will bring revenue to the company and help the Muslim community as well as the local economy. I’m just a student but IGU has the ability to look into this financial endeavor for Muslims. Let me know if IGU want to know what I’ve found out and if it’s worthwhile to explore. Best regards & jazakallah khair

[@Fatimahjangana]

Wa Alaikumus Salam wa Rahmatullah May Allah bless you, I live in the US too and would like to share that you don’t really need a credit score to thrive. You can get a home, buy a car, get protection, etc by using a debit card. Never had a credit card, and hope to never have one. It’s very doable.

[@xadiq]

As I understand it, and I use mainly credit cards with cashback, the banks earn 3-5% of the transaction amount which they charge the merchants. Out of those amounts, the banks return to me 1.5-2%. In way, I am rewarded with proceeds from my own purchases. Is my understanding wrong?

[@hamzah3138]

I use my credit card rather than my debit card because of the consumer protection feature. I pay off the total balance by variable direct debit every month. Thank you for explaining the source of the "Rewards" I'll make sure to cleanse that monthly. Again an excellent video. Thank you

[@bobjeetgill9076]

Goodluck trying to book a hotel when ur family is on a trip

[@Mohammed-ej5ix]

You can use a debit card

[@raz0051]

Yeah I stopped using credit card like 4 years ago, got in a lot of mess because of it. No matter how good you think you are in paying back, it still comes back to bite especially if you don't need it. Also since I stopped using it, I live better mentally without any worry of potential debt. I have tangible assets, stocks, crypto, multiple debit cards, whatever is in there is how much I can spend / save / invest / give, simple. Everyone always talks about how you need credit card to build credit, but most of the time the credit is to show the lenders how good you as a individual in paying back 'their' money & if you miss a payment then that stays on your 'record' for years, then you have to build it back up using a credit card. Scummy to me.

[@azizurgoni]

Can someone from ifg answer please or someone else. Q. If halal ETF ECT can invest in companies with 1/3 debt to assets= halal screener. Can Muslim not also take a loan for a house up to 1/3, therefore also halal investment. If companies can do it why can't Muslim if it halal?

[@EatPrayTradeBitcoin]

Brother Thank god I have Never had a credit Card in my life CREDIT CARD money all I use is Debt WHEN I HIT ZERO IT MEANS IM ZERO HALAL MONEY ONLY THATS WHY IM BOOTSTRAPPED MAN I BELIEVED IN U BUT YOU OUT HERE TALK ABOUT APR Apy man C’Mon !!

[@Mzd10006]

They're impermissible unless out of necessity. When using it out of necessity we should remind ourselves of the impermissibility (similar to car insurance) and Allah knows best