A review of Islamic credit card concepts from shariah perspective in Malaysia

• Main Authors: Abubakar, Balarabe, Md. Faruk, Abdullah, Baba Uba, Ibrahim
• Format: Conference or Workshop Item
• Language: English; English; English
• Published: 2020
• Subjects: BP Islam. Bahaism. Theosophy, etc; H Social Sciences (General); HG Finance
• Online Access: http://eprints.unisza.edu.my/1880/1/FH03-FPP-20-40429.pdf; http://eprints.unisza.edu.my/1880/2/FH03-FPP-20-40430.pdf; http://eprints.unisza.edu.my/1880/3/FH03-FPP-20-40431.pdf; http://eprints.unisza.edu.my/1880/
• Institution: Universiti Sultan Zainal Abidin

The Islamic credit card is introduced by Islamic financial institutions to substitute the conventional credit card. Credit Card-I has played a significant part in the progress of Islamic banking in Malaysia. A group of contemporary scholars have an unfavourable opinion on credit card operations. They argue that it is a modern way of reviving riba and a hilah (trick) to legitimise interest. The concepts of Inah and Tawarruq were disapproved by the majority of the Islamic scholars in the Hambali, Maliki, and Hanafi schools of jurisprudence, and some contemporary scholars considered them as sales contracts intended as a legal stratagem to legalise debt with riba (interest). However, this problem drove some Malaysian Islamic banks to come up with the concept of Ujrah, which is accepted by the more significant number of scholars as to the best substitute for Inah and Tawarruq. This paper aims at reviewing the scholars’ views on the concept of Inah, Tawarruq and Ujrah applied in the Islamic credit card. The study will examine the views of classical and contemporary scholars on the concept of Inah and Tawarruq. It will then further discuss the concept of Ujrah and views of scholars regarding the Ujrah. A qualitative method was used by adopting library research, and the study mostly relied on primary and secondary sources of Shariah. The study relies on the Quran, Hadith and jurisprudence to achieve the objective. The findings highlighted that the credit cards based on the concept of ujrah (fee) are acceptable to contemporary scholars if the structure operation did not involve riba (interest).