Shariah Compliant Credit Cards

Shariah law is a religious law that is an important part of Islamic traditions. As per Shariah law, Muslims are not allowed to participate in any financial practice or do business with any money-lending entity that charges interest which is also known as Riba.

On the basis of Shariah law, several banks and financial institutions offer Shariah Compliant Credit Card. This type of credit card strictly follows Shariah laws which prohibit Gharar and Riba. Gharar is the sale of what is not present. For example, the sale of crops that aren’t harvested yet. Riba is an interest while Gharar is an overcharge. So, when an individual uses a Shariah Compliant credit card, they will not be charged interest on the outstanding balance. Overcharging is strictly prohibited under Shariah law. Thus, there are no compound charges. Instead of this, some Shariah-compliant credit card providers may levy a monthly profit on the outstanding balance or they might charge a fixed monthly fee, depending on the credit card issuer.

Shariah Compliant credit card offers a viable option for Muslims to get a credit card while staying true to their faith. Non-Muslims can opt for Shariah Compliant credit cards as well. Apart from conventional credit card, they can opt for the Shariah Credit Card and avail its benefits and features.

Difference between Shariah Compliant Credit Card and Conventional Credit Card

Shariah Compliant Credit Card offers features similar to conventional credit cards. The offered charges are slightly different.

Here are the difference between the features of a Shariah Compliant Credit Card and a conventional credit card:

Basis	Shariah Compliant Credit Card	Conventional Credit Card
Interest	No interest is charged on the Shariah Compliant Credit Card.	The interest rate may vary, depending on the outstanding amount.
Takaful Coverage	Many Shariah Credit Cards offer Takaful coverage to the credit cardholders.	It does not offer Takaful coverage.
Late Payment Fee	Fixed amount + 3% of outstanding amount where the 3% is typically donated to charity.	It charges late payment fee plus retail interest rate on the outstanding amount.
Transaction Restrictions	The purchase of tobacco, gambling, alcohol, pork, and other items is strictly prohibited using Shariah Compliant Credit Card.	Cardholders can purchase any item as there are no restrictions as such.
Zakat Payment	Yes	No

Features and Benefits of Shariah Compliant Credit Card

Shariah Compliant Credit Cards are packed with amazing privileges and exclusive benefits. Some of the major benefits of Shariah Credit Cards are as follows:

• No Interest: Any interest (Riba) is strictly forbidden under the Shariah law. That is why Shariah Compliant Credit Cards do not charge any interest. The cards charge “profit rate” for the offered service. It will only be charged if the outstanding amount is not paid within the grace period.
• Cashback: Some of the Credit Cards offer cash back on every single transaction made by the cardholder.
• Travel Benefits: Just like conventional credit cards, Shariah credit card also offers travel perks and privileges to the cardholder. From travel rewards to complimentary airport lounge access, it fulfils the need of frequent traveller by offering them the best travel benefits.
• Bonus Points: Shariah Compliant Credit Card members earn points on the usage of the card. The accumulated bonus points can be redeemed for buying anything on a discounted rate or waiver of annual fees etc.
• Extra Privileges: Credit cards offer extra perks & privileges, and the same goes for Shariah Compliant Credit Card. They usually offer Takaful coverage to their cardholders in order to provide protection against any unforeseen event such as critical illness, permanent disability, and much more. In addition to this, the Shariah credit card member will also have the convenience of paying their Zakat.
• Worldwide Acceptance: All the Shariah Compliant Credit Cards come with worldwide That means cardholders have the freedom to use the card across the globe.
• Supplementary Cards: They also provide the facility of availing supplementary cards. That means Shariah Compliant Credit Card members can avail supplementary cards for the eligible family members.

Shariah Compliant Credit Card Eligibility Criteria

The applicant can easily apply for Shariah Compliant Credit Card if they meet the eligibility criteria. Following are some of the factors that determine whether the applicant is eligible for Shariah Compliant Credit Card or not:

• Age: In order to apply for a Shariah Compliant Credit Card, the minimum age of the applicant should be 21 years and the maximum age should be 65 years.
• Income: In order to apply for the Shariah Compliant credit card, the applicant must have a steady source of income.
• ID Proof: In order to apply for the Shariah Compliant Credit Card, the UAE nationals must have Emirates ID and expats must have a valid passport and visa.
• Credit History: The applicants should have a good CIBIL score as a poor credit score may result in the rejection of the credit card application.

How to Apply For Shariah Compliant Credit Card?

The process of applying Shariah Compliant Credit Card is the same as applying for a conventional credit card. Applicants can apply for a Shariah credit card online as well as offline.

Mentioned below is the application process for the Shariah credit card:

Online

The applicant can directly apply for a Shariah credit card online if they meet the eligibility criteria. They just need to log on to the official website of the credit card provider and select the card that perfectly suits their credit card needs. All they have to do is click on the apply button, duly fill in the basic details, and click on the submit button.

Once all the details are provided, the credit card provider will take some time to verify the credibility of the filled in information. Based on the provided information, the credit card provider will decide whether the applicant will get the credit card or not.

Offline

The applicant can apply for Shariah Compliant Credit Card offline as well by physically visiting the nearest bank branch. The bank executive will guide them about the various Shariah Compliant Credit Cards. On the basis of their credit card preference, the applicant can opt for the one that suits their credit card needs the best. After zeroing down the credit card, the applicant needs to duly fill in the credit card application form. If they meet the eligibility criteria as per the credit card provider’s guidelines, their credit card application will be accepted.

Shariah Compliant Credit Card Limit

Credit card limit is basically the purchase limit that is set by the credit card provider on a particular credit card. In terms of money, the credit card limit is the maximum amount the cardholder can spend in a month using the credit card. For example, if the credit card provider offers a credit card with a limit of AED 50,000, the cardholder can’t spend beyond that amount on their credit card.

However, every Shariah Compliant Credit Card offers a credit limit which varies from applicant to applicant, depending on various factors such as:

• Applicant’s credit history
• Applicant’s monthly income
• Limits on other credit cards (if have already)

How to Find the Best Shariah Compliant Credit Card?

In the UAE, there are numerous banks and financial institutions that offer Shariah Compliant Credit Card. But the benefits and features are not always the same. They may differ from a credit card provider to credit card provider. Therefore, it is advised to compare credit card online on the basis of their features, privileges, and charges so that the cardholder can opt for the best one.

Following are some of the important factors that the applicant should keep in mind when choosing Shariah Credit Card:

• Profit Rate: The first major step before choosing a Shariah-compliant credit card is to compare the profit rate of various Shariah Credit Cards. It helps to find the Shariah-compliant credit card with the lowest profit rate.
• Takaful Coverage: Before opting for the Shariah Compliant Credit Card, it is also important to check if the Takaful coverage is compulsory or optional. And if it is compulsory, don’t forget to check the extra fee that is applicable for the Takaful coverage.
• Spending Rewards & Points: Majority of the Shariah Compliant Credit Card providers offer exclusive discounts and bonus points for using their credit card which can be redeemed for availing various benefits.
• Fees & Charges: It is very important to check the fees and charges that are associated with the usage of the card as it helps the cardholder to use the card prudently.

Why Should You Choose Policybazaar.ae?

Policybazaar.ae is an all-in-one platform that offers a platform to compare various financial products. It makes personal finance decisions easy for individuals by offering unbiased results. When it comes to zeroing in on the best Shariah Compliant credit cards, the cardholder can compare various benefits, features, and charges. It enables the applicant to opt for the best Shariah Compliant credit card.