ISLAM AND CREDIT CARDS

It is often the case that the battle between Islamic and conventional credit cards is on product features. The impact of the competition in this lead the consumer’s preference to ask:

• Which one offers more value for money?
• Which one offers low penalty rate?
• Which one offers free bonus points more?
• Which one looks fancier?
• Which one gives annual fee waiver?

However one should ask, are these the selling point for Islamic credit card? It is sad to see that many marketing strategies for Islamic credit cards talked about product features rather than selling the ethical values and concept underneath to the consumers. The equation that always in the mind of consumer about Islamic financial product is cheap. Meaning to say that, in any Islamic debt-financing facilities, the rate of return to the financier should be at the lowest point of the profitability quadrant. Why such discrimination exists?

Islam permits the use of credit card so long it does not involve the element of usury. As an example if the withdrawing cash advance from the credit facility will result payment of an interest, it is prohibited. Similarly if there is an additional interest charge due to delay in payment, it is prohibited also. Therefore, if the credit card serves as a charge card, where you only pay the principle amount that you use plus the service charges, it is permitted.

In credit card transaction, the doctrine of Bai Al-Inah is used to validate the transaction. The argument of validity of bai al Inah is debated between Muslim The doctrine of bai al-Inah or buy back sale is not recognized by some scholars including the Ulama from the Middle-East. But in Malaysia, the doctrine of Bai Al-Inah is recognized, and is used as one of the basis to justify the implementation of credit card under the Shariah discipline.

In the context of Bai Al Inah, the use of doctrine Al Masalih Al Mursalah is adopted in order to justify the using of such transaction in the credit cards or personal financing. In the new era of globalization, many financial dealings were not exactly the same to the practice in time of Prophet (s.a.w.). Innovation of financial products was evolved due to the changes in the technology and time. People try to innovate a new thing that can make life better off. This is not only goods and service innovation but to the financial products as well. The idea was to ensure a comfortable life, which is also a wish of Allah (s.w.t.) as evident in the following ayat (Al-Baqarah 2 :185) :

“ Allah (s.w.t.) intends every facility for you; He does not want to put you to difficulties.”

The used of Masalih Al Mursalah can be applied in the credit card transaction, since Allah (s.w.t) want us to have easiness in the life but off course to be harmonized with the Quran and Sunnah so it will not deviate from the Shariah teaching.

In the credit card transaction among the advantages of using it is convenience to the buyer, security wise, and cost effective are considered to benefits the user in terms of giving a comfortable life. Although the usage of credit cards is unlimited especially in the digital world, issues surrounding the applications of credit cards need to be addressed so that the acceptance among Muslims can be improved.