Journal Article

Considerations Of Credit Card Markets From The Shariah Perspective

Robb, Cliff A

2016

Overview

This paper provides an in-depth study of credit card markets from a Sharia perspective, focusing on the challenges of aligning this financial instrument with Islamic principles. The author explains the growing importance of credit cards in modern economies as a primary means of payment, consumption, and short-term borrowing, but highlights the inherent Sharia concerns due to their reliance on interest charges and financing fees. The study examines the economic effects of widespread credit card use, noting that while they enhance liquidity and stimulate consumer spending, they also encourage debt accumulation and impose financial burdens on individuals, contradicting the Sharia objective of preventing harm and exploitation. It further stresses that profits for issuing institutions are predominantly derived from interest and debt-related charges, rendering conventional credit cards incompatible with the prohibition of riba. The paper discusses potential alternatives, such as debit cards linked to current accounts, cards structured on kafalah or murabaha contracts, and prepaid cards that allow users to benefit from technological convenience without incurring Sharia violations. The author emphasizes that the key challenge is reconciling consumer needs with religious compliance through innovative financial products that balance efficiency and ethics. Ultimately, the paper concludes that credit card markets can expand in Islamic economies if products are redesigned to eliminate riba and adopt service- and transparency-based models, thereby making them safe, beneficial, and socially responsible tools. Abstract Written by Dar AlMandumh, 2025, Using AI

• Publisher: جامعة الملك عبدالعزيز - معهد الاقتصاد الإسلامي
• Subject: أجهزة الصراف الآلي / الأجهزة المصرفية / الأسواق / البطاقات الإئتمانية / التشريع الإسلامي / السياسة المالية / الفقه الإسلامي / النظام المالي / النظام المصرفي / مستخلصات الأبحاث