Journal Article

Monzer Kahf And Amiirah Nabee Mohomed Credit Cards: Contemporary Issues From Economic And Sharīʿah Perspective

Nabi, Mahmoud Sami

2016

Overview

This paper examines contemporary issues surrounding credit cards from both economic and Sharia perspectives, highlighting the challenges posed by their rapid global expansion. The author stresses that while credit cards significantly improve transaction efficiency and provide consumers with flexible access to credit, they also create serious economic risks, including debt accumulation, overconsumption, and higher rates of financial default. From a Sharia standpoint, the study identifies the interest charged on late payments as a clear form of riba and additional penalty fees as exploitative practices that contradict Islamic principles of justice and fairness. It further critiques the reliance of issuing institutions on these charges as their main source of profit, which renders conventional credit card systems incompatible with Sharia requirements. The paper suggests possible alternatives that reconcile efficiency with compliance, such as prepaid cards, debit cards linked to current accounts, or products structured around Islamic contracts like murabaha and kafalah. It argues that the key challenge lies in designing financial instruments that meet modern consumer needs without encouraging harmful indebtedness. Ultimately, the study concludes that credit cards are not inherently impermissible, but their conventional structures require significant reform. With appropriate Sharia-compliant models, they can become instruments that support both economic stability and social welfare. Abstract Written by Dar AlMandumh, 2025, Using AI

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