sharia credit card

Jemma-T

Hydromancer wrote: »

I reckon it's just making money by exploiting people's religious beliefs.

Exploitation/religion = same thing.

It's like these 'Adopt a donkey' adverts. These adverts are aimed at certain people.

I wasn't aware we had Islamic-styled bank accounts in the UK. If there's money to be made I'm sure the money men will work out a few tricks to bypass some silly stories from 2000 years ago.

It is money after all.

Voyager2002

Hydromancer wrote: »

The products are open to all. Islamic credit cards are not offered in the UK...in countries that they are offered in, mainly Malaysia, Middle-East etc. they're a bit like secured credit cards combined with a fixed monthly/annual fee.

Islamic mortgages or "home purchase plans" are offered in the UK by HSBC and Islamic Bank of Britain as well as some other niche lenders. Your monthly payment is made up of two parts:

1) you pay the bank a part of the original purchase price which increases your "share" in the home
2) you pay the bank for 'renting' the property out to you. This is basically an interest rate as it normally calculated using the Bank of England base rate.

However, Islamic current accounts are offered by both Lloyds and HSBC among others. There is either no overdraft or with some Lloyds accounts (I think) an interest-free overdraft. The money is invested in Shariah-compliant investments, basically not in gambling, alcohol, tobacco, weapons, pornography or financial services etc. Most of the investment according to HSBC is done in the oil, software and pharmaceutical industries

Interestingly, Christianity forbids charging interest in exactly the same way that Islam does. In the early days of banking in Europe (about six hundred years ago) bank loans were carefully structured to charge fees rather than interest, with agreements avoiding anything that said outright that the fee was for the use of the money for a specified time.

udydudy

I guess "Financing costs by any name would still cost the consumer the same or nearly the same"....the differemnce being like any other difference in various financial product costs.

Finally whether the OP wants to call it "fixed fee costs" or "Interest" the lender would ensure the cost to the consumer would cover all its overheads and financial costs. I guess its only a matter of choice(religious or otherwise).

personally i think its all hoo-ha about nothing. financial costs are financial costs irrespective of what it is called. The only thing really sharia about the investments is where the underlying investment is not invested in gambling, alcohol, tobacco, weapons, pornography or financial services etc. though the final part "financial services" is similar to the "interest/fee" fiasco as in the very fact that the organisation is giving a service which financially benefits the consumer(whether the gains are called profits or interest) and is automatically in itself "financial services". So how come benefiting from the financial services of an organisation "Sharia Compliant"??

I am personally not a religiously inclined person, I respect all religions and peoples right to follow whatever religion they choose to.

So I would like to emphasize that there is no religious offence meant here but just an attempt to try and understand the basic concept in itself which seems to be self contradictory.

Ali_Baba

I investigated the "Islamic Credit Card" phenomenon a couple of years ago. There was something called Cordoba Gold being offered in the UK, claiming to be an Islamic Credit Card. It was no such thing. It was merely a prepaid debit card.

A giant marketing con in my mind, as prepaid debit cards don't charge you interest under normal operations. And t was also a major rip-off compared to pretty much any other prepaid debit card as the fees were outrageous for using it. They claimed they were "Sharia compliant" because they gave 10% of their profits to charity. :rotfl:

To put it simply, there is no such thing as an Islamic Credit Card because Islam forbids the receiving of interest and credit cards are a purely interest-based financial product.

Norfolk_Jim

Sharia compliant products are open to non muslims too. I used to have car insurance that was primarily aimed at muslims - the whole concept of insurance is a problem for muslims but they need to comply with UK law to drive, so needed the product. They closed for business after a fairly short life.

hoffage123

The way that I use credit cards is to pay it off in full every month (hence, no interest). So from my perspective (as a Muslim), then I feel that's ok. But others may feel differently.

wadewadewade

The workings of any Sharia-compliant financial product will be different to a standard financial product - e.g. "charges" instead of "interest", investing in different funds.

However, what you as the consumer will see and pay will be largely the same, if not worse as it has more restrictions.

Sadly, it's not a workaround to avoid paying interest!

anon_ymous

hoffage123 wrote: »

The way that I use credit cards is to pay it off in full every month (hence, no interest). So from my perspective (as a Muslim), then I feel that's ok. But others may feel differently.

Same. Thats how I pay mine off as well