In the name of God the compassionate the merciful
Today our focus is on bank cards used by various bank customers. In general, there are myriads of bank cards issued by various banks and financial institutions to their customers, however, our main attention is going to be on the aforementioned cards.
They are the most popular. All of us need to know the Islamic rulings on these cards. Unlike charge cards and credit cards, those of us here in Ghana are already familiar with debit cards. Let all pay attention to these rulings, especially our Muslim brothers and sisters living in Western countries where these cards are commonly used daily.
Firstly, a Charge Card: is a type of payment card that bank customers can use to make purchases. Unlike a credit card, a charge card requires the cardholder to pay the balance in full each month. This means that the cardholder cannot carry a balance from month to month and must pay off the charges in full by the due date. Charge cards typically have higher fees and stricter credit requirements compared to credit cards.
Secondly, a credit card: is also a type of payment card issued by a financial institution that allows cardholders to borrow funds to make purchases, pay for services, or transfer balances from other cards. Credit cards typically have a preset credit limit, which is the maximum amount of money that the cardholder can borrow.
When a credit card is used to make a purchase, the cardholder is essentially borrowing money from the card issuer.
The cardholder is then required to pay back the borrowed amount, along with any applicable interest charges, based on the terms and conditions of the card agreement. If the cardholder does not pay off the full balance by the due date, they will incur interest charges on the remaining balance. Essentially, there is no difference between charge cards and credit cards, since in both cases interest is imposed.
Last but not least, is a debit card: it is a payment card issued by a financial institution that is linked to the cardholder’s checking or savings account. When a debit card is used to make a purchase or withdraw cash from an ATM, the funds are immediately deducted from the cardholder’s account.
Unlike a credit card, which allows cardholders to borrow money up to a preset credit limit, a debit card only allows cardholders to spend the funds that are available in their linked account. This means that cardholders cannot exceed the balance of their account when using a debit card. Debit cards also typically do not charge interest on purchases because cardholders are using their own money. The use of the debit card is very common here in Ghana, whilst that of credit and charge cards is mainly common in advanced Western countries.
Fiqh Islamic ruling: The Islamic Fiqh Council, in its twelfth session, 23–28th September 2000, posited that “It is impermissible to use any bank card that the issuer has imposed riba (interest) on, this is so, even if the cardholder has the intention to pay (the price) within the moratorium period that precedes imposition of interest. It is however permissible to use such card when there is no imposition of interest”.
This means charge cards and credit cards are impermissible because of the imposition of interest, whilst debit cards are permissible because it is free of interest.
However, credit cards and charge cards are permissible only on the condition that the issuer agrees that if a loan or debt is created from the use of cards, no return can be charged on the cards since that will be tantamount to charging interest.
And Allah knows best! Praise be to Allah in whose favour good deeds are accomplished” (ibn Majah 3803)
YAHAYA ILIASU MUSTAPHA
The writer is an Islamic Banking and Finance patron and advocate in Ghana and beyond.
Email: yahaya0246873726@gmail.com
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