What is the difference between Islamin credit card and conventional credit card?

Answer 1

This is my view. Please go through more articles on the same.

Islamic Credit Card

Conventional Credit Card

Goods are purchased on the principle of

a) Bai Bithman Ajil with bank purchasing the goods on behalf of the client and selling it back to client at a higher price.

b) Bay al inah consisting of two agreements. In the first agreement the customer buys merchandise from the bank at a stipulated price. In the second agreement, the bank buys back the merchandise from the client at a lower price.

Goods are purchased by client and not by the bank. Bank gives credit for the purchase.

The customer is expected to pay back the credit as agreed between the bank and customer - usually an year) with a minimum amount paid at regular intervals

No end period for the credit repayment is agreed upon by the client and bank.

No interest in case of credit not paid immediately

If credit is not paid within 50 days of purchase, interest is applicable on the credit.

No penalty or penalty amount paid to charity purposes

Penalty is applicable in case of late payment and is paid to the bank

Credit card should be used for halaal transactions and should not be used for haraam transactions such as bars, betting, alcohol, tobacco etc

No such restrictions exist in the use of conventional credit card

Either cash withdrawal is not there or if it is there it is given as Qard Hassan(interest free loan)

Cash withdrawal using conventional credit card involves interest payment