Islamic Credit Cards

[pongsakorn]

Dear friends,

I am researching on Islamic credit card. As the data revealed, UK is one of the biggest Islamic banking countries. However, I have researched and found that UK Islamic banks, especially IBB does not provide any Islamic credit cards. I presumably that UK credit card demand would be very high and should attract Islamic banks to be in this business. I am wondering is there any reason why Islamic banks in UK do not offer Shariah compliant credit cards like Malaysia and UAE. One reason I suspected is that there are legal regulations on this type of credit card business that prevent them to enter. However, I was not be able to find the Britain financial laws and regulations that directly relate to Islamic credit card. If any of you have more expertise and knowledge, please feel free to let me know about the regulations. I am appreciated your help.

Thank you.

[Tools]

Re: Islamic Credit Cards

Hi Pongsakorn

At the moment there is no UK credit card only debit cards through a Sharia compliant current account provider that complies with Sharia finance but it is only a matter of time before one is launched.

[teaboy2]

Re: Islamic Credit Cards

Credit cards are legislated by the CCA which allows for charging interest - There is no legislation for Islamic Credit Cards, which would be not much different to that of an islamic debit card anyway.

Basically, where would the profit and financial risk protection be for Islamic creditors that issue Islamic credit cards? As they would only be able to charge a small annual fee (Ijarah, or Service Charge) and such fee would not cover the financial risk of the creditor from those that do not repay or can not afford to repay. Where as interest on standard credit cards does!