I know a hadith says buying gold/silver must be on spot. But online is much cheaper for gold/silver coins and bars for investment. And someone said online is okay because the point of that hadith is to avoid interest, he said if the deal is finalized, then the deal is halal, sort of like amazon.com or other places where you finalize it. Also, one online place, you call, they give you a price, then they call you back 10-20 minutes later or so to confirm the order, record the call and it is finalized, in that time (between calls) I THINK if the price jumps A LOT then the deal is called off. Also I deposit the money before hand, like before the first call even I put it into their bank account. If I go to a physical store, it costs much more, the mark up is much more. If I go to a physical store, will using credit card or debit card be haram? Or is that "on spot?" I really do not see how this is in anyway Riba though, like if I pay for it online, do we even know if that hadith is authentic? I mean their must be a reason, someone said it is because that is Riba, I really do not see how it is Riba to buy online, and such. Salam

All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad is His Slave and Messenger.

We have previously issued Fatwa 88034 clarifying the permissibility of selling currencies and other items, for which it is a condition that this be done on spot, on the Internet if on-the-spot payment is fulfilled virtually.

Receipt of payment can either occur physically [i.e. cash in return for the product – hand to hand] or virtually and the exchange is valid.

One form of virtual payment is a bank draft or check. This is when one party deposits the money in the account of the other immediately or by bank transfer, or submits a certified check, or the like.

You have mentioned that you deposit the money in the account of the company but what remains to be examined is how you receive the gold or coins that you purchase. If you have a safe with them and they put the gold in it or if you authorized a person to receive the gold on your behalf, or it is a trade of currencies and the monies are transferred to your account immediately, then this is permissible.

However, if direct payment is not realized [according to the two methods already mentioned above], then the transaction is not permissible because it is Riba (usurious interest) as the Prophet said in a Saheeh (sound) Hadeeth: “Gold is to be paid for by gold with equal weight, like for like, and silver is to be paid for by silver with equal weight, like for like. He who made an addition to it or demanded an addition has dealt in usury.” [Muslim]

Banknotes are legally the same as gold and silver. Therefore, it is not permissible to buy gold with dollars except with the condition of immediate exchange [of product and price] either physically (i.e. cash in return for the product) or virtually.

As regards purchasing gold and the like from a store and paying with a credit card, then this is permissible if the card is covered, i.e. if its owner has a balance at the source (such as the bank). But if the card is not covered, then it is not permissible to buy gold and so forth with it.

The fourth article from the fifteenth session of the Islamic Fiqh Council reads: “It is not permissible to buy gold and silver as well as monetary coins with a card that is not covered.”

For more benefit, please refer to Fataawa 173393 and 133410

Allaah Knows best.