CREDIT CARDS IN MALAYSIAN BANKS: BETWEEN CONTEMPORARY NEEDS AND SHARIAH COMPLIANCE

البطاقة الائتمانية في البنوك الماليزية: بين الحاجة المعاصرة والضوابط الشرعية

Abstract

This study aims to explore the role of credit cards in contemporary life, focusing on their economic and social dimensions, as well as the extent to which their use aligns with Shariah regulations in Malaysian banks. Credit cards have become a vital financial tool that facilitates daily transactions, resulting in increased usage amid rapid advancements in commerce and services. However, their use raises several Shariah-related concerns, particularly regarding interest charges for late payments, which are considered a form of riba (usury) prohibited in Islamic law. The study addresses these challenges from a Shariah perspective, analyzing their impact on individuals and society, and reviewing alternative financial solutions that comply with Islamic principles, such as credit cards issued by Islamic banks. The research employs both inductive and analytical methodologies and includes a comparison between conventional and Shariah-compliant credit cards to assess the effectiveness of Islamic alternatives. The findings indicate that credit cards represent a modern financial necessity but are not without Shariah risks, most notably riba and debt accumulation. The study highlights that 4,875 individuals in Malaysia declared bankruptcy due to credit card debt. It also notes the tangible efforts made by Islamic banks to provide Shariah-compliant alternatives, although challenges remain in implementing these solutions effectively within the market. The study recommends strengthening cooperation between Islamic banks and financial institutions to develop Shariah-compliant credit products and to offer innovative solutions that balance economic needs with religious guidelines. It also calls for a more active role of Shariah supervisory boards in monitoring and ensuring compliance with Islamic principles in the use of credit cards.