ISLAMIC CREDIT CARD: RECENT DEVELOPMENT FROM A SHARIAH PERSPECTIVE

Abstract

Islamic Credit Card (ICC) have emerged as a highly preferred payment method among consumers, primarily due to its foundational principles that aim to avoid prohibited elements under shariah. However, despite their growing popularity, ICC is not without challenges. The contractual structures underpinning the product has raised concerns regarding its compatibility with shariah principles. In particular, both tawarruq-based and ujrah-based ICC models are fraught with multiple issues, warranting a thorough and rigorous review by relevant stakeholders. This study employed qualitative research design through which case study is analysed using content analysis related to policy documents, issuers’ fine prints, articles and journals to fully understand the concept of tawarruq and ujrah as an underlying contract for the ICC. The tawarruq-based and ujrah-based ICC structures appear to conflict with core shariah principles, thereby necessitating regulatory intervention for potential enhancement and restructuring. However, this study is limited by the absence of formal endorsement and approval from SAC of BNM, shariah committees and advisors, which constrains a comprehensive articulation of both ICC underlying applications. Therefore, future research should seek direct interpretation and guidance from the aforesaid experts to ensure greater clarity and alignment with shariah compliance.