Halal Credit Card in US

[brendacast]

Assalamu-Alaikum everyone,

I have seen a few posts regarding halal credit card options in the US. Recently, I came across Chime. They offer Checking account (https://www.chime.com/no-fees/) with:

- No monthly fees

- No minimum balance requirement

- No overdraft fees.

In addition to that, they offer a Credit Card (https://www.chime.com/credit-builder/) with:

- No credit check to apply

- No annual fees

- No interest

- No minimum security deposit

- No foreign transaction fees

Basically, you transfer money from your Checking into your Credit Card account and use that, so it works like a debit card, but they report to all 3 credit bureaus to help you build credit over time. Here's a video from Chime to explain more --

. They do not have any cash backs.

In order to get the credit card, you need to have a direct deposit of $200, which will make you eligible to get the credit card. I believe you only need one direct deposit (and rest can be bank transfers) to fund your credit card account usage.

You can, of course, go directly to chime.com and register. However, if you use below referral link, you get $150 (usually it's $100, but there's an additional $50 offer happening) as soon as the direct deposit of $200 hits your account, and I get $100. Here is the referral link -- https://www.chime.com/r/nilofarali

Jazak'Allaah for your time!

Mods -- If I am not allowed to share the referral link, please let me know and I'll remove it from the post.

 

[princesst1]

@brendacast No fee or interest

For Chime Checking Account holders with eligible direct deposit²

 

[brendacast]

@princesst1 Where are you seeing that as the requirement for no fees or interest? The initial direct deposit is required to be eligible for the credit card (and the promotional offer).

Edit: I believe you're referring to the https://www.chime.com/credit-builder/ page, which has the following texts with superscript of [sup]2[/sup]:

"No minimum security deposit required²" and "For Chime Checking Account holders with eligible direct deposit²"

This is what superscript [sup]2[/sup] points to in the footer:

Money added to Credit Builder will be held in a secured account as collateral for your Credit Builder Visa card, which means you can spend up to this amount on your card. This is money you can use to pay off your charges at the end of every month. Minimum Security Deposit"]

Also from their FAQ "Does Chime charge any fees?":

We don’t believe in unnecessary fees or profiting from our members’ misfortune. We have no fees to sign up, no overdraft, no monthly or service fees, no minimum balance fees, no transaction fees, and no card replacement fees either. We do charge one fee ($2.50) when you get cash from either an over the counter withdrawal, or an out-of-network ATM that is not part of Chime’s fee-free network of 60,000+ ATMs

Please note that third-party services, such as money transfer services used to deposit funds or out of network ATM used to withdraw funds to your Chime Checking Account may impose their own fees per transaction.

 

[princesst1]

@brendacast

Money added to Credit Builder will be held in a secured account as collateral for your Credit Builder Visa card

That means is secured credit card but actually it'a debit card that reports to credit bureaus. So essence, I have a Chime debit card btw, they make money from the service by selling your data and from fees from third party vendors.

Chime makes money in two ways. It takes a portion of the 1.5% to 2% interchange fee Visa charges a merchant every time a customer uses Chime’s card that contributes ~80% to Chime’s topline. Chime also makes ~20% of its revenue from fees its customers pay for using out-of-network ATMs.

https://sacra.com/c/chime/

 

[brendacast]

@princesst1 Yes, which is exactly how I explained it in the post:

"Basically, you transfer money from your Checking into your Credit Card account and use that, so it works like a debit card, but they report to all 3 credit bureaus to help you build credit over time."

The purpose is to avoid having to deal with interest and having the ability to build credit history, so if it's done through a prepaid debit card, is there a harm? I am getting the benefit of my history being report to the credit bureaus.

 

[princesst1]

@brendacast It's not haram however as I stated. the price you pay i snot fees nor interest but data.

for companies that do sell their data, they work with third-party data brokers, such as subsidiaries of the major credit rating agencies, Feit notes. Buyers of this data gather information about a customer’s behavior across multiple interactions with various entities — the credit card issuer, car dealership, online shopping site and others. “You get a very rich sense of the customer’s behavior,” Feit says. “It’s really a problem in my mind because the consumer doesn’t necessarily know that their data is being sold to this third-party broker” and to whom the broker sells it.

https://knowledge.wharton.upenn.edu/article/data-shared-sold-whats-done/

It is a necessary evil in banking world but I posted that inform people.

You buy a product and next thing you know you receive ads in mail or email for similar product. That happens because your data was sold and connected to a profile that marketers use.

 

[dwhite081705]

@brendacast Just get a normal credit card and only borrow what you can afford and ensure to pay off in full. This notion of 'halal' credit card is ridiculous, as long as you are not intentionally paying or receiving interest, it is permissible.

Of course when I say borrow what you can afford, I mean you make sure with every ounce of certainty you can pay it off 10x over.

 

[brendacast]

@dwhite081705 It’s not permissible because the contract itself is haram because you are agreeing to pay interest if you miss a payment.

 

[dwhite081705]

@brendacast Don't believe that tbh, as long as you know for sure you have the means to pay off whatever you buy on a credit card, you're sensible with it and you have the intention to not pay a single penny of interest, that is enough in my eyes.

You mention this other credit card to help build credit, why are you trying to build credit? The only things you need good credit for are mortgages, loans, etc - all haram things.

 

[jgdesigner]

@dwhite081705 What if you die? I’ve always found this “certainty” argument with interest contracts very interesting. You never know 100% that you can pay anything on time because you don’t know the future.

 

[dwhite081705]

@jgdesigner ?? If I die, then any credit cards that need paying off will be paid off with the money I have? It's a direct debit, it's done automatically.

Yes you are correct, we do not know the future. However, this is where you become sensible with how much you are spending on a credit card. I ensure I can pay this off multiple times over. I ensure I have a savings account I do not touch, and if I lose absolutely every £ somehow, I'm fortunate enough to be able to go to people I know for money who will be able to help me out. It's important to have safeguards in place.

Also, from what I have experienced, banks are generally considerate for mistakes. When I was paying it manually and missed my payment by a day, the interest that was charged immediately refunded when I explained the situation. I then set up direct debits to ensure this doesn't occur again.

 

[sbmor777]

@brendacast That is one opinion but there are many scholars that say credit cards are ok to use as long as you always pay in full and avoid paying any interest.

https://www.amjaonline.org/fatwa/en/1195/about-credit-cards

https://www.islamicfinanceguru.com/articles/are-credit-cards-haram-or-halal

But if you want to avoid this then secured credit cards, like the Chime one you found, are an alternative.

 

[bencollyer91]

@sbmor777 Those links contain 0 scholars brother

 

[simplydawn]

@brendacast Since chime requires a direct deposit, I found another credit builder that's essentially a debit card. It's called fizz debit card (joinfizz.com) but it reports to credit bureaus. No interest, no fees as well, and doesn't require a direct deposit! It just connects to your main bank and withdraws directly from it (daily if you use it daily). I just ordered one 2 days ago and waiting for it to arrive, but I can start using it immediately since card details are on the account (gave me a limit of 500$). If anyone knows anything about it that makes it haram please let us know!

 

[resol]

@brendacast Your referral link is not working for me. Could you update it? Im planning on signing up