Debit Card, Charge Card, and Credit Card - Appendix B

Transcription

1. Shari ’ah Standard No. (2): Debit Card, Charge Card and Credit Card Appendix (B) The Shari’ah Basis for the Standard 1. Debit Cards It is permissible to issue debit cards subject to the conditions mentioned in the standard, because such issuance does not incur any Shari’ah prohibition. 2. Charge card It is permissible to issue charge cards subject to the conditions mentioned in the standard, because such issuance does not incur Shari’ah prohibition and because the contract involved does not grant credit facilities to the cardholder in exchange for interest. Prohibition might be caused by conditions incorporated in the contract, or by dealings of the cardholder, which contravene the Shari’ah. 3. Credit card It is prohibited to issue credit cards, as mentioned in the standard, where such issuance is based on a contract granting the cardholder the right to a revolving credit on terms that involve interest, because Riba is prohibited in terms of either taking or giving. The prohibition of Riba is established through Quranic Texts, direct and certain Hadiths of the Prophet (peace be upon him) and the consensus of Muslim scholars, rendering its prohibition well known in the Muslim community as self-evident. However, the issuance of credit cards free from Riba, or from any other legal prohibition, is permissible. 4. Institution’s affiliation to membership of international card regulatory organizations is permissible because the contracts of the Institutions with those organizations are free from Shari’ah infringements. The fees that the companies pay are the charges for the services rendered by the international organizations, by granting a license, carrying out set- 80
2. Shari ’ah Standard No. (2): Debit Card, Charge Card and Credit Card off in transactions and other services. The transactions do not relate to the advance of loans interest, since the dealings of the Institutions are confined to debit and charge cards that are free from any requirement to pay interest. These dealings do not involve credit cards of the type that are not permissible for the reason given above. 5. It is permissible for Institutions to charge the party accepting a card commission based on the prices of purchases or services made with the card, as this can be considered as partly a brokerage and marketing fee as well as a service charge for the collection of the debt. 6. It is permissible for Institutions to charge the cardholder membership or renewal or replacement fees, because these fees are in exchange for the right given to the customer to carry the card and to benefit from its services. 7. Purchasing with a debit card constitutes constructive possession as endorsed by the Shari’ah. When the purchaser receives gold or silver or currencies which he is buying, uses the card and signs the payment coupon for the account of the party accepting the card, then constructive possession takes place. This ruling is extracted from the decision of the International Islamic Fiqh Academy(2) which states that an accounting entry is considered to be constructive possession. Thus, the legal condition of taking possession is satisfied when using cards to purchase gold or silver or currencies. 8. It is permissible for the cardholder to withdraw cash from his available funds at the bank using the card, because this is to withdraw his own money. Likewise, it is permissible for him to withdraw more than his available funds from the Institution, if the latter has agreed that he may do so and has not stipulated that interest is payable on the such amounts. This is a permissible loan. 9. In the case of the Institution stipulating that the cardholder must deposit a sum of money prior to receiving approval to use the card, then it is not (2) International Islamic Fiqh Academy Resolution No. 53 (4/6). 81
3. Shari ’ah Standard No. (2): Debit Card, Charge Card and Credit Card permitted for the Institution to prevent the cardholder from investing the amount deposited in his account, as this would be tantamount to a loan that draws extra benefit. For that reason, the appropriate alternative is for amounts so deposited to be invested for the benefit of the cardholder on the basis of profit and loss sharing. 82