IslamicFinance.de

The existence of interest, variation of charges on the basis of amounts of cash withdrawals using the cards and the fact that the default rates with quite punitive charges are some of the features that makes the conventional credit cards non-compliant from the Islamic perspective.
In order to comply with the Shariah principles and guidelines, Islamic banking has embraced the needs of customers by repackaging and reimagining existing conventional banking products or engineering innovative products. These help regulating human interactions and transactions to promote transparency, fairness, justice and accountability to each other. The provisions of interest, the financing of business ventures involving alcohol, arms trade and undertaking excessive risks as well as ambiguous contractual obligations that end up benefiting some parties in transactions at the expense of others, form part of the Shariah’s prohibitions. Credit cards are therefore considered offensive to the Shariah standards
Credit cards are popular as they are portable and secure in addition. But the existence of interest, variation of charges on the basis of amounts of cash withdrawals using the cards and the fact that the default rates with quite punitive charges are some of the features that makes the conventional credit cards non-compliant from the Islamic perspective. The use of the credit cards to make purchases like alcohol and other non-Shariah compliant transactions are strictly prohibited and this is reflected in the terms and conditions of use of the cards.
Both conventional and Islamic banks issue their clients with credit cards with well-defined limits in line with their credit policies, terms and conditions in place.The conventional and Shariah compliant credit cards do attract one time joining or membership fees and annual renewal fees as well as replacement charges for lost cards.