The following is a very detailed fatwa (religious edict) published by the scholar's of Egypt. Enjoy! :)
Prayer beads are beads attached on a string used to invoke one’s normal invocation on. It is a new word introduced into Islamic discourse, and it is a means to righteous actions. Therefore, since means take the ruling of their desired goals, the prayer bead is a recommended act as it aids in one invoking God.
The prayer bead is a permissible tool for a Muslim to use instead of counting on one’s fingers or digits during one’s regimen (wird). It is better than counting on one’s fingers and digits if one is safer from making mistakes this way allowing the heart to concentrate. The proof text for its permissibility is the hadith narrated on the authority of S‘ad ibn Abi Waqqas who entered with the Prophet upon a women who had in her hands pebbles or date seeds which she was using to invoke, and the Messenger of God said,
Shall I inform you of that which is easier and better than this? Say “praise be to God the number of His creation in the heavens, praise be to God the number of His creation in the earth, praise be to God the number of His creation between the two, praise be to God the number of His creation that He has created, God is the greatest the same amount, all praise is due to God the same amount, there is no deity but God the same amount, and there is no power nor strength except by God the same amount.”
The Prophet did not prohibit her from her action; rather he guided her to that which was easier and better for her to do. If there were something reprehensible or detestable in her actions he would have pointed this out.
The jurists have understood this text to be one indicating the permissibility of invoking with either the hands or with prayer beads outside of the prayer similar to counting with one’s heart or finger tips. During prayer, however, it is considered a reprehensible act as it is not from the actions of the prayer. Abu Yusuf and Muhammad, from the Hanafi School, ruled that there was nothing wrong with using prayer beads after canonical or supererogatory prayers.
There are many hadith concerning this issue such as:
1. On the authority of al-Qasim ibn ‘Abd al-Rahman who said, “Abu Darda’ used to have ajwa date seeds in a bag. When he would pray the dawn prayer he would take them out and invoke with them until they finished.”
2. On the authority of Abu Nadra al-Ghaffari who said, “An old man from Tufawah informed me, ‘Abu Hurayyrah settled in Madina and I have never seen anyone more diligent than him, and I have never seen anyone more honorable towards their guests than him. One day I was with him and he was on a mat with a bag of pebbles or date seeds which he was using to invoke. Below him was a black slave girl who would collect them once he would finish and return them to the bag.’”
3. On the authority of Na‘im ibn Muharar ibn Abi Hurayyrah, on the authority of his
Grandfather Abu Hurayyrah that he [Abu Hurayyrah] had a rope with one thousand knots and he never slept without invoking with it. This hadith has been narrated by Abdullah the son of Imam Ahmad in Zawaid al-Zuhd and by Abu Na‘im in his Hilyat al-Awliya. The same has been narrated by S‘ad ibn Abu Waqqas, Abu Sa‘id al-Khudri, Abu Safyyah the client of the Prophet, and lady Fatima the daughter of al-Hussayn who is the son of ‘Ali ibn Abi Talib.
Many scholars have composed works demonstrating that the use of prayer beads is religiously sanctioned. Among the well known works are the treatises by Imam Jalal al-Din al-Suyuti “al-Munha fi al-Subha”, Sheikh Muhammad ibn ‘Allan al-Sidiqi’s “Iyqad al-Masabih Limashru‘iyat Itikadh al-Masabih”, and Abu Hasan al-Laknawi’s treatise “Nuzhat al-Fikr fi Subhat al-Dhikr”.
We will also quote the relied upon jurists from the various schools of law to further clarify this issue.
1. From the Shafi‘i School Ibn Hajar al-Haythami was asked “do prayer beads have a source from the sunna?” and he replied accordingly:
Yes, and many scholars have composed works concerning this matter such as Imam al-Suyuti. From the sunna we have the following hadith from Ibn ‘Umar who said, “I saw the Prophet invoking with his hands.” And the hadith from Safiyyah who said,
the Messenger of God came in upon me and in my hands were four thousand date seeds I was using to invoke and he said to me “What is this daughter of Hay?” and I said, “I invoke with them.” And he said, “I have invoked more than this since the moment I saw you.” and I said, “teach me Messenger of God.” and he said, “say ‘praise be to God the number of His creation.’”
Ibn Abi Shaybah, Abu Dawud and al-Tirmidhi have narrated the following text: “Praise God, proclaim His Oneness and sanctifying Him, and do not be forgetful so that you would forget monotheism. Count by your finger tips as they are held accountable and will testify [on the day of judgment].” Invoking with stones, seeds, and tied ropes has also been documented by many from the companions and those after them. Al- Daylami has narrated with a raised chain (marfu‘ ) “how great a device for invoking the prayer bead is.” Some of the scholars have opined that invoking with the fingertips is better than a prayer bead based on the hadith of Ibn ‘Umar, while others have preferred the prayer bead, while still others have detailed the issue by saying if one is safe from making mistakes then the fingertips are better and if not then the prayer bead is better.
2. From the Hanafi School Ibn Abidin has stated:
“there is nothing wrong with using a prayer bead” which is a device used for invoking…the proof of its permissibility is the hadith narrated by Abu Dawud, Tirmidhi, Nisai, Ibn Hibban, and Hakim (who said it is rigorously authentic) on the authority of S‘ad ibn Abi Waqqas [quoted above]. The Messenger of God did not forbid her from this act; rather he guided her to that which was easier and better. If this act were reprehensible he would have indicated this. The prayer bead does not add anything to this hadith except connecting the stones by a thread. This sort of addition does not add anything to prevent the act. There is also nothing wrong in that it has been related that many of the elect of the Sufis used to have prayer beads as well as others. By God, however, if there is ostentation in using prayer beads we have nothing to say. The aforementioned hadith also attests to the preferred status of the specific mentioned invocation over other invocations that are freely composed even if this specific invocation is recited but a little.
3. Al-Shawkani has also written brilliantly:
The two previously mentioned hadith [quoted above] indicate the permissibility of counting invocation with date seeds and stones; likewise prayer beads, as there is no difference in the Prophet’s affirming the two women’s actions. His lack of disavowing their action and advising them to that which was better does not negate the permissibility of the act.
This same meaning has been found in hadith narrated in the Juz’of Hilal al-Haffar on the authority of Mutamir ibn Sulayman on the authority of Abi Safiyyah the client of the Prophet that a leather mat would be placed for him and a basket made of palm leaves filled with stones would be brought to him from which he would invoke until midday when he would get up. After [the noon] prayer he would return to it [and invoke] until the late afternoon. This hadith was also narrated by Ahmad in his book al-Zuhd on the authority of ‘Affan, on the authority of Abd al-Wahid ibn Ziyad, on the authority of Yunus ibn ‘Abid, on the authority of his mother who said, “I saw Abu Safiyyah, a companion of the Prophet and he was a treasurer….he used to invoke with stones.”
Ibn S‘ad also narrated on the authority of Hakim ibn al-Daylam that S‘ad ibn Abi Waqqas used to invoke with stones. Ibn S‘ad also says in his Tabaqat that, “we were told by ‘Abdallah ibn Musa, on the authority of Isra’il, on the authority of Jabir, on the authority of a women who used to serve him, on the authority of Fatima the daughter of al-Husayn the son of Ali ibn Abi Talib that she used to invoke with a rope that was tied [in several] knots. Abdallah the son of Imam Ahmad narrated in Zawaid al-Zuhd on the authority of Abu Hurayrrah that he used to have a rope that had one thousand knots and he would not sleep until he finished [invoking on them all].
Imam Ahmad in his book al-Zuhd narrated on the authority of al-Qasim ibn Abd al-Rahman who said, “Abu Darda’ used to have ajwa date seeds in a bag, and he would invoke with them after praying the dawn prayer one by one until they finished. Ibn S‘ad also narrates on the authority of Abu Hurayyrah that he used to invoke with date seeds grouped together. Al-Daylami narrates from the musnad of al-Firdous from the chain of Zaynab bint Sulayman ibn ‘Ali, on the authority of Um al-Hazan bint Jafar, on the authority of her father, on the authority of her grandfather, on the authority of ‘Ali with a raised chain (marfuan) who said, “how great a device for invoking the prayer bead is.” Imam al-Suyuti has compiled these traditions in a treaties entitled al-Munha fi al-Subha which is a portion of a larger work al-Majmu fi al- Fatawi. [Imam al-Suyuti] has stated in the end of this treatise “no one from the pious ancestors or the later scholars has been documented as prohibiting counting invocation using prayer beads. Rather most of them used to commonly use prayer beads and they found nothing reprehensible in this.”
From this previous discussion we can see that invocation on prayer beads is a recommended act, and it is better for a person if they feel they will make a mistake in counting on their own. This way one’s heart will be involved and collected during invoking and God is most high and most knowledgeable.