By Abdullahi Jamaa
Gulf African Bank is introducing a new credit card dubbed ‘Awwal’ which it says is the first Sharia compliant credit card in East Africa. Certainly this will create a new wave of debate on Islamic legality of using credit cards in general.
Gulf African Bank says its product offers ultimate convenience and flexibility through its many unique features. The bank describes the benefits of having its credit card in a fashion more common to conventional banks.
While the product’s flier attached to one of the local dailies cites that Awwal has been approved by the bank’s shariah supervisory board, a lot can be asked genuinely and with utmost respect to understand the fine details of this new financial product.
Let us leave Gulf African Bank and its Awwal credit Card for now.
And we are dealing with the topic of Riba (Interest) which is one of the seven destructive sins that share almost or equal punishment with shirk (associating partners with Allah), magic, killing an innocent person, eating the property of an orphan, running away from the battlefield and accusing chaste women.
The use of Credit Cards in conventional banking and also within Islamic bank is one of the most widely accepted facilities that invites discussions on its legality within the context of sharia.
Islamic economists and scholars have studied the Islamic lawfulness of using Credit Cards in an era where issuing banks use it as a means to raise additional finance and diversify their sources of funds.
Credit cards have been used to securitize loans and debts where many issuing banks charge interest putting it into the list of prohibited interest-laced transactions.
It’s expressly clear that Islamic sharia does not allow interest laden credit cards that only benefits the issuing financial institutions. While credit cards promote consumerism and debt-compilation which is disliked in the religion of Islam, its mode of lending and borrowing strengthens the dirt and darkness that comes with Interest.
The counsel of Islamic Fiqh in the Academy of Organization of Islamic Conference debated on the issue of credit card in its twelve session in the year 2000. Through a resolution, they resolved that conventional cards are not permissible in Islam if it includes imposition of interest.
Usually, riba in credit card is charged in two situations i) either for delay in payment as a late payment fine, or ii) daily interest on balance amount of deferred payments. Either way, the Riba (interest) paid over and above original amount is legally considered prohibited (haram).
Modern day riba similar to the fashion of credit cards involves the price of a rent paid on money in exchange of its use. In contemporary banking, the entry of exploitative interest has turned money into a commodity of trade.
With riba, money is no longer a medium of exchange. One can buy and sell money in any market, a practice that makes interest tantalizingly within the rich of most people. Since money is now a commodity, banks sell money to individuals and business, enticing them with a longer repayment plan.
The selling and buying of money is now as competitive as bread and butter. The sweet-lacing of loans and bigoted descriptions of financial products even amongst Islamic banks has put believers into a religious crossroad.
Imam Al-Ghazali said trading in money for earning some interest makes money an end object like a market commodity. “Engaging money in that way is an oppression”
Ibn Majah recorded that Abu Huraira (RA) said that the prophet (SAW) said, “Riba is seventy types, the least of which is equal to one having sexual intercourse with his mother.”
In its modern forms, it shaped the backbone of economic frustrations that remains to be a true hurdle in the way of economic emancipation further widening the gap of the haves and have-nots. The interest that is paid by banks, or charged on loans, or car loans, or mortgages, or credit card debts all fall under the devilish arm of riba.
Islam prohibits eating people’s money unjustly and considers riba as one way of stealing people’s money. Allah (SW) states: “And do not consume one another’s wealth unjustly or send it [in bribery] to the rulers in order that [they might aid] you [to] consume a portion of the wealth of the people in sin, while you know [it is unlawful].”(Quran 2:188)
All forms of economic exploitation certainly touches the issue of interest. Over the past few decades, Islamic finance has witnessed exponential growth that includes the entry of different of forms ambiguous financial facilities.
