Tuesday, April 23, 2019

The Islamic Bank Credit Card Facility


Credit cards is among the non-cash payment methods that has been growing exponentially. Credit card generally uses credit balances advanced by a bank to make payments. The bank charges cardholders for using the credit payment system or based on the outstanding balances owed. However, charging fees based on the outstanding balances can tantamount to Riba Nasi’ah. To avoid this Riba, the Islamic banks have packaged their cards based on certain Islamic ‘transaction principles’. These packages include Tawarruq cards, Charge cards, Qard Al-hasan cards, Bay Al-Inah cards, Murabahah cards, e.t.c.

4. 1 Tawarruq Islamic Credit Card


Whether it is a good or bad experience you had as a credit card user, credit card, as the name suggest, is the card that allows you to take loan from the issuing bank in making   purchases. Basically, what happens it that the bank is lending money to the customer upon purchase and the customer would be making deferred payment of the loan?
However, since the application of conventional bank charges interest on the loan, Islamic banks had to structure a different way of providing the same service without interest.

In order to achieve this, Islamic Credit Card product available in the market operates under Tawarruq Contract. Wonder how it operates? Let’s see how Islamic Credit card using Tawarruq works!





Other features of Islamic Credit Card

  • Generally, credit cards have tenure facility for 3 years
  • Security documents for the facility are as follows:
             . Letter of Offer
             . Tawarruq Sale Agreement
             . Tawarruq Purchase Agreement
  • The card will normally be affiliated/associated with 





The Islamic Consumer Financing Products:

1. The Islamic Bank Credit Card Facility
2. The Islamic Bank Personal Loan Facility
3. The Islamic Bank Automobile Financing Facility
4. The Islamic House Financing Facility

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