A rabbinical student told me that their use is permitted on the Sabbath as no money changes hands. It is just a promise that the bank will pay at a later time. I disagreed and said swiping the card causes an electronic spark(s). He said that handing over a credit card to the cashier to swipe nullifies this reasoning, to which I responded that entering a pin number or signing an electronic pad nullified that. He then agreed and said only a card that is swiped by a cashier with a hand signed receipt was the solution. Who was correct? I still disagree with their use on the Sabbath, with no justifying arguments.
I agree with you. Even if technically there wouldn’t be any melacha involved in using the credit card, and no money changes hands, chazal however forbade us to do all types of transactions on shabbos. The reason is because when business transactions are done it usually involves a writing a receipt, which is meleches kosaiv, therefore all transactions are forbidden. This is the reason we may not marry or make a pidyom haben on shabbos, and it is the reason we may not separate challah of terumos and maasros, because they are transferring something from one person to the other. In fact even giving someone a present is not permitted on shabbos. Therefore, even if technically it would be true that the credit card doesn’t have any melacha attached to it, (which it might, because it causes writing or and a copy of the transaction is recorded with the credit card company) it would still not be permitted.
Aside from this, the credit card is also muktza machmas chisaron kis (an item that won’t be used on shabbos because of fear of incurring a loss). An item that doesn’t have a shabbos use because it faciliates something that is not permitted on shabbos, such as a hammer or a pen is called a kli chemilachto l’issur. Included in this are items that help facilitate business transactions such as money or a credit card. This is a low grade muktza, as there are certain times that it may be moved. A credit card or money is a higher form of muktza because the owner is also afraid to leave it around because he is afraid that it will cause him a loss, (i.e. if it gets lost or stolen) Therefore it is muktza machmas chisaron kis, and may not be moved at all on shabbos.
Rashi Beitza 37a D:H Mishum, Shulchan Aruch O:CH 306, also see O:CH 339-4, M:B 323-1,