Credit Card from Shariah Perspective

Credit Cards from Shari’a

Perspective

Dr. Abdulazeem Abozaid

Consultant & Shari’a

Trainer

Emirates Islamic Bank

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‫ﺑﺴﻢ اﷲ اﻟﺮﺣﻤﻦ اﻟﺮﺣﻴﻢ‬

THE FEATURES & USES OF CREDIT

CARDS

Credit Card provides a revolving credit facility within the

credit limit and credit period determined by the issuer of

the card. It is also a means of payment.

The holder of a credit card is able to pay for purchases

of goods and services and to withdraw cash, within the

approved limit.

The amount of the purchase becomes the cardholder’s

debt to the credit card issuer.

The card issuer determines the credit limit and taking

into account customer’s salary and previous credit rating

when deciding on how much credit to give.

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When purchasing goods or services, the cardholder is

billed on a monthly basis and is given a free credit period

during which the amount due should be paid and no

interest is chargeable. The cardholder is also allowed to

defer paying the amount due and is charged interest for

the duration of the credit. In the case of a cash

withdrawal, there is no free credit period.

If using the card overseas, foreign exchange charges

and transaction charges may also be applicable.

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Card networks (Visa, MasterCard, DinersClub etc.) are

accepted worldwide and allow a cardholder to purchase

goods directly.

Credit cards can be used online (on the Internet).

Also, they can be used to withdraw cash from a bank or

ATM.

Having a credit card is safer and more practical than

carrying large amounts of cash when traveling, or for

buying high value items such as jewelry.

Credit cards are also useful to make direct debit

arrangement for regular bills such as utilities and

telephony charges, and for paying in foreign currency

when traveling abroad

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Some cards come with additional services such as

medical cover for international holidays, purchase

protection and a variety of promotional offers.

The interest charges on credit cards...