Sharia Credit Cards For Muslims

Muslims who follow Sharia Law have for a long time been excluded from modern day credit card use because of the variable interest rates.  According to Sharia Law, Muslims cannot engage in any loan transactions whether mortgage, insurance, credit or loans of any kinds that charge any form or interest at all.  It has been the disconnect between the Western customer-oriented and centered  atmosphere and Islamic culture, even for those Muslims who live in the Western World. Several banks have come together to fill that void between Western culture and Islamic Law by creating no-interest credit and debit cards. 

How Does Sharia Compliant No-Interest-Credit And Debit Cards Work?

The Sharia Compliant No Interest Debit Card

This works similar to any debit card only instead of the bank charging you interest, you get charged a flat yearly fee for using the card.  Usually this fee is around $50.  The card does not accrue variable interest and since the funds come from you, you know where the money is coming from.

For Example:  The iFreedom Sharia Compliant debit card from MasterCard allows you to use credit.  To use the card, you pay $50 every two years for an activation fee and you can use the card anywhere just like a credit card.  You can pay up to $6000 in a reserve account and any money you use is withdrawn from that account at no interest. 

Other credit card companies like Visa have also come out with their variation of a Sharia complaint debit and credit card so this is wonderful news for Muslims everywhere.

The Sharia Compliant No Interest Credit Card

The bank usually gives the customer a line of credit based on the customer's credit worthiness.  The only fee that is paid is a regular monthly fee supposedly for "collateral." This collateral is usually in the form of a deposit of a certain amount.  With the Sharia Compliant credit card, the customer cannot use it for "haram" activities such as buying cigarettes and alcohol or pork. Since the fees that are paid are not variable they don't qualify as interest.  This "collateral" stays deposited and the bank agrees to share the profits it makes from lending out your deposit to other customers-in the form of true profit sharing.  So the bank pays you back for lending out your "collateral" deposit according to the amount they stipulate in their agreement. Usually 80 percent to 20 percent in which you get 20 percent of the interested from the loan they gave to non Sharia complying customer,  and the bank gets 80 percent.

For both cards, there are no overdraft fees

It's hard to know if these cards are truly Sharia compliant because Muslims also cannot use funds from businesses who engage in gambling or other prohibited activities.  It is difficult to know the day to day actions of any business and what they actually use their money for.  For this reason it is better to use the Sharia compliant debit card instead of the so-called Sharia compliant credit card because at least you know where the funds are coming from when you use the debit card. 


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