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Table of Contents


Introduction..................................................................................................... 2


Definitions and Types of Credit Cards.....................................................................3


Types of Credit Card AmIslamic Bank.................................................................4


AmIslamic Bank World MasterCard-I............................................................4


AmIslamic Bank Visa Infinite Card-I.............................................................4


AmIslamic Bank Visa Signature-I.................................................................4


AmIslamic Bank Al-Taslif Platinum Card-I.....................................................4


AmIslamic Bank Card Al-Taslif Gold/Classic Card-I.........................................5


AmIslamic Bank True Card-I.......................................................................5


AmIslamic Bank Carz Card-i.......................................................................5


Credit Card Function.......................................................................................... 6


The Differences of AmIslamic Credit Card and AmConventional Credit Card....................7

4.1 Table of two different product of AmBank Group which are AmIslamic bank
product and Ambank conventional product........................................................9
The Differences of the AmIslamic Credit Card System and the AmConventional Credit Card
System................................................................................................................... 11

AmConventional Credit Card System.................................................................11


AmIslamic Credit Card System........................................................................12


The Use of Islamic Credit Cards..........................................................................14


HUKM of Credit Card..................................................................................14


The Advantages and Disadvantages of Credit Cards...............................................15


Conclusion and Recommendation........................................................................17

References.............................................................................................................. 18



AmBank was established in August 1975, AmBank Group also is one of the largest banking
groups in Malaysia. The Group comprises AMMB Holdings Berhad which is a public listed
company on the Main Board of Bursa Malaysia, with subsidiaries offering a wide range of
conventional and Islamic financial products and services. The vision of this bank is through
offering innovative financial products and excellent customer service, coupled with
sustainable business growth and strategic business partnerships with global key players,
AmBank Group is well placed to achieve its Vision As Malaysias preferred diversified,
internationally connected financial solutions group, we take pride in growing your future with
AmIslamic Bank is a member of Ambank Group Established in May 2006. AmIslamic
Bank has built a solid reputation in serving the banking needs of individuals and corporations
since its beginning as Ambank Groups Islamic Banking Division in 1993. With its universal
banking licence and 19 years of experience in offering Islamic banking products and services
via Ambank Group channels, AmIslamic Bank aspires to further grow the heritage of its
excellent track record in Islamic banking through AmIslamic Banks branches, extensive
network of shared branches, AmOnline Internet Banking and AmGenie Mobile Banking as
well as e-Banking Centres nationwide.
Being the first in region to market numerous product innovations, AmIslamic Bank
continues to provide a wide and comprehensive range of Shariah compliant product and
services. AmIslamic Bank is also committed to providing a complete range of new potential
customers in line with its mission to be the Islamic bank of choice. One of the products that
are included in this bank is a card. There are three types of cards namely credit cards, prepaid
cards, and debit cards which each card has its own benefit and function. However, our group
has agreed to choose a credit card from Bank of Am Islamic. This is because we believe that
the use of credit cards at present as a medium of transactions is increasing. Therefore, we will
highlight a variety of content and variety of credit card products issued from this AmIslamic


Definitions and Types of Credit Cards

Nowadays, the development of technology has enabled bank to issue product that satisfy the
need of clients. Credit card is one of the latest banking gadgets which is It facilitates people
to make transaction without carrying cash since the credit card issuer pays the proceeds of the
transaction on behalf of the buyer. Most goods and services can be bought either online or at
the usual brick and mortar sales outlets by using this card. This convenience has led the
widespread of credit card. Therefore, not only conventional banks interested to issue credit
card, Islamic banks which notably have to comply with the Islamic principle also start to
come out with this product.
The meaning of Islamic credit card is from Massey defined Islamic credit card as a
payment instrument that meet with at least three criteria of Islamic principles. Firstly, the card
must meet the Shariah requirements on lending, which vary from region to region. In general,
it must avoid the three essential prohibitions in Islamic finance, which are riba, gharar and
maysir. Secondly, an Islamic credit card must have certainty to be accepted widely and it has
to use international payment schemes, such as MasterCard or Visa. Besides, the card should
provide facilities that are not available on debit cards such as CVV numbers for card not
present transactions and hold amounts. Furthermore, the merchant charges and issuers fees
should not be withheld. Thirdly, an Islamic credit card should not encourage behaviour that is
considered haram. This includes all manner of forbidden behaviours and transactions of an
inappropriate nature.
In Malaysia there are many people having their own credit card. The holders of the
card are only permitted carry out halal transactions, which exclude transactions related with
six categories that dont meet Shariah requirements. These categories are bars, discos, night
clubs, purchase of beers, escort and massage services and gambling. Operation of BIC
involves three aqad (contract), namely Bay al inah, Wadiah, and Qard al Hassan.
In AmBank Islamic Group there are many product and services that have been
provided. for the Islamic Credit Card there are seven credit card which is AmIslamic Bank
World MasterCard-I, AmIslamic Bank Visa Infinite Card-I, AmIslamic Bank Visa SignatureI, AmIslamic Bank Al-Taslif Platinum Card-I, AmIslamic Bank Card Al-Taslif Gold/Classic
Card-I, AmIslamic Bank True Card-I and AmIslamic Bank Carz Card-i (Group, 2015).


Types of Credit Card AmIslamic Bank

2.1.1 AmIslamic Bank World MasterCard-I

This type of credit card provide a service for Golf Privileges where in this services it
for Tee off at The Finest Golf Courses in South East Asia and can enjoy 50% discount
on green fes. Besides, other service which is fast track your frequent flyer miles which
mean Convert AmBonus Points to Air Miles with 3 world class Frequent Flyer /
Travel Reward Programs. In addition, this credit card also gives the customer a
protection with RM2 million travel takaful coverage.
2.1.2 AmIslamic Bank Visa Infinite Card-I
The services that provided also is the same with the other where firstly is airports are
now better where the customer can enjoy an exclusive 24% discount on Immigration
Fast-Track Service at 390 international airports. besides, this credit card also give a
protection to customer with RM2 million travel takaful coverage when the full fare of
airline tickets are charged to the Card.
2.1.3 AmIslamic Bank Visa Signature-I
The services that provided by this credit card is also airports are now better where th
customer enjoy an exclusive 15% discount on Immigration Fast-Track Service at 390
international airports. Next, this crdedit card also give protection to the customer with
RM1 million travel takaful coverage when the full fare of airline tickets are charged to
the Card.
2.1.4 AmIslamic Bank Al-Taslif Platinum Card-I
In this credit card the services that provided is Airports are now better where the
customer can enjoy the unwind in private and escape the hustle and bustle of busy
airports with privileged access to Plaza Premium Lounge at 17 international airports.
Besides, the cervices also give a card which knows no boundaries where the customer
can enjoy with worldwide recognition, AmIslamic Bank MasterCard/Visa credit cards
helps you pay with peace of mind. Credit card payments can be made online via
Internet Banking, our 24 hours e-Banking Centres or over 180 branches nationwide.
The card also gives protection to customer with RM1 million travel takaful coverage
when the full fare of airline tickets are charged to the Card.

2.1.5 AmIslamic Bank Card Al-Taslif Gold/Classic Card-I

This credit card have a difference with the other card where the services that this card
provided is a card which knows no boundaries where With worldwide recognition,
AmIslamic Bank MasterCard/Visa credit cards helps the customer pay with peace of
mind. Credit card payments can be made online via Internet Banking, this company
24 hours e-banking centres or over 180 branches nationwide. Besides, the customer
will be rewarded when they shop and Earn 1 AmBonus Point for every RM1 you
2.1.6 AmIslamic Bank True Card-I
This card is more different than the other card where the customer has a credit card
that functions exactly like a credit card, but without the burden of extras that the
customer do not need. Next, Get the things that the customer want now and take
advantage of our 0% easy instalments for up to 36 months at selected merchants and
get the things the customer want now.
2.1.7 AmIslamic Bank Carz Card-i
A card that caters for motorists and packaged with all auto related benefits. It is
packed with a vast of unique privileges meticulously put together. From discounts and
rebates to value added services, the customer can feel at ease that the customer regular
auto-related requirements are addressed by AmIslamic Bank CARz Card-i. The choice
of car is Platinum MasterCard and Gold Visa.


Credit Card Function

5C What is 5C, it represent career, condo, car, cash and credit card. Credit Card has become
important to our everyday life. With credit card we can represent the use of cash in our
everyday transaction. For example, Ali buy laptop with RM 2000, he use credit card instead
of using cash which he need to redraw from ATM to pay the goods. But important thing he
needs to pay the credit card on the end of month.
In using credit card represent cash lots of transaction happens in order to make the
transaction works smoothly.






As from diagram above, show transaction when using credit card. Start from customer
buying goods and paying it up using credit card. Shop accepts the credit card and inform to
merchant bank regarding the transaction. This transaction issued to credit card company and
finally to the customer bank. Which in the end of month, customer will pay the goods using
their money to their appointed bank.
The main characteristic of use of credit card by most of brilliant customer is to pay for
their fuel in appointed fuel station, as for Malaysia, PETRONAS is the fuel station that
provides the use of credit card. The use of credit card will give benefit to customer for
example customer will get point of buying the fuel. This also will help the customer to not
carry too much money in their pocket. Other function of credit card is we can also booking
flight, hotel, buying online; renew road tax, insurance and so on.
The most important of use of credit card is to repay back all transaction that been
made in order to prevent any unwanted interest for paying late.


The Differences of AmIslamic Credit Card and AmConventional

Credit Card

Generally, AmIslamic credit card can be defined as a payment instrument that meets with at
least three criteria of Islamic principles. There were three criteria that need to be meet by the
AmIslamic credit card which are the card must meet the Shariah requirements on lending,
which vary from region to region, AmIslamic credit card must have certainty to be accepted
widely and AmIslamic credit card should not encourage behaviour that is considered as
For the first criteria, the card must meet the Shariah requirements on lending, which
vary from region to region. From the statement, the AmIslamic credit card must be avoid the
three essential prohibitions in Islamic finance, which are riba, gharar and maysir. Riba as we
all know that can be known as interest concept that clearly had been telling in the Holy
Quran and the Hadith of Prophet Muhammad peace be on him. Therefore, if user of the
AmIslamic credit card made a late payment, the AmIslamic Bank does not allowed to charge
an interest for the late payment of the AmIslamic credit card. Same also with the Gharar that
is uncertainty which are the practice of AmIslamic credit card should be avoided by
excluding any activity that just make an uncertainty cases such as a charging scheme where
the monthly repayment or service charges are variable based on a number of factors. In
addition, the maysir or gambling activities is also prohibited for the user to use AmIslamic
credit card to use in the accessing sites that are more toward online gambling (Niringjuerae).
A second criterion is an Islamic credit card must have certainty to be accepted widely.
For the AmIslamic credit card, the card will provide facilities such as CVV numbers for card
not present transactions and hold amounts with free from the merchant charges and issuers
fees (Niringjuerae).
Thirdly, an AmIslamic credit card does not encourage behaviour that is considered
haram. An AmIslamic credit card usage is limited to permissible activities only. The Islamic
card Issuer will decline transactions from six categories that known as non-halal activities,
including Bars, Discos, Night clubs, purchase of Alcohol/Non Halal Goods, Escort and
Massage services and Gambling (Niringjuerae)

Different with the AmConventional Credit card which are means of payment that
involves the concept of Buying first and paying later or also known as interest bearing
loans. The AmConventional Credit card is a symbol of monetary value and comes with a
revolving credit facility with a pre-approved credit limit and payment period. The user of the
AmConventional Credit card is charged annual fees and interest on unpaid balances after the
grace period. This means that the interest is charged to the cardholder on unpaid balances
after the expiry of the grace period and interest is strictly prohibited in Islam. There also no
restrictions are imposed on the usage of the AmConventional credit card for making any type
of payment including the transactions that non-permissible by Islamic views. The insurance
that offered under the AmConventional credit card is a conventional and may not be
compliant with Shariah principles because has a interest.

Besides that the amount of

outstanding for the AmConventional Credit Card is been charged with the value of
compounding interest on it (Gupta, 2012).

4.1 Table of two different product of AmBank Group

which are AmIslamic bank product and Ambank
conventional product.

AmIslamic Bank Al-Taslif Visa


Platinum Card-i
- Earn 1 point on every RM 1.00

AmBank M-Platinum Visa Card


(spending on all local retail




Earn 2 points on every RM 1.00

Earn 10 points on every

RM 3.00 (spent on local

Earn 10 points on every

(spending on all overseas retail

RM 6.00 (spent on overseas



Privileged access to 17 Premium

Stay protected with

Plaza Lounges at airports around

protection of up to RM2

the world

million travel insurance for

AmPrivate Banking Client

you and your family.

Unlimited complimentary

services and receive at some of

Plaza Premium Lounge

the most spectacular golf courses

access at 17 international

in the world and enjoy 24 hour

airports. Just charge 3

access to the Platinum Priority

overseas transactions your


credit within 30 days of

your lounge visit for it to be

Annual fee
Annual fee for

RM 0 (Free for life)

RM 0

free of charge.
RM 450.00
RM 250.00 *

supplementary card
Late payment fee

RM 10.00 or 1% of outstanding

RM 10.00 or 10% of

amount, up to a maximum of RM
Interest period
Cash withdrawal
Person who can

Free all period
RM 50.00 *
Takaful coverage

outstanding amount, up to a

maximum of RM 100.00
20 days interest free period
RM 15.00 or 5% of

withdrawn amount *
Invitation from the Ambank

Conventional insurance

Zakat payment


No, and the total liability is
known upfront to the customer

Not included
Yes, compounding interest
charged on outstanding

*subject to 6% GST.


The Differences of the AmIslamic Credit Card System and the

AmConventional Credit Card System


AmConventional Credit Card System
The Visa, Switch and MasterCard all operate four party payment schemes.

Any card

transaction made through one of these schemes involves four main participants. The four
participants are the customer (who makes a payment using the card), the card issuer who
supplies the card to the customer and operates the account from which payment is made), the
retailer (who exchanges goods or services for the customers card details and consent to make
the payment (Niringjuerae).
The process started when the merchant acquirer who recruits retailers to the scheme,
reimburse the retailer and obtains funds from the card issuer. The merchant acquirer often
has an existing customer relationship with the merchant, but need to do so. A payment
involves both flow of assets money and goods and also a flow of information about
transactions that are taking place. These are shown on the diagram below.

The transaction starts with a customer deciding to buy some goods from a retailer at a
given price. The customer gives his card details to the retailer and confirms his identity, for
example with a signature. For some transactions the retailer may be required to seek an
authorization from the card issuer, for example to check that the card is not stolen. The

retailer then sends transaction details to the merchant acquirer. Transaction details may either
be sent in a batch at the end of the trading day or online. The acquirer in turn forwards
transaction and cardholder details to the relevant card issuers usually through a telecoms
network under the control of the scheme. The merchant acquirer pays the retailer the retail
price less a fee, known as a merchant service charge (or MSC). The issuer in turn pays the
merchant acquirer the retail price less a further fee known as an interchange fee. The timing
of the payment from issuer to acquirer is typically determined by the rules of the payment
scheme. The timing of the payment by the merchant acquirer to the retailer is determined by
agreement between these two participants. The final stage is for the issuer to debit the
customers account - this might be a credit card account or a current or savings account, in
the case of a debit card. The issuer will typically provide the customer with transaction details
through a regular statement. The customer will be debited the retail price, plus any fees
specified in the terms of the account (Niringjuerae)
AmIslamic Credit Card System
Ambank in Malaysia has offer Islamic credit cards to their customers as for examples the AlTaslif Credit Card launched in December 2001. These cards are structured on the Shariah
principle of Bai Al Inah that covers instalment repayments over a fixed period. Cardholders
are charged 1.25% per month or 15% per annum on the outstanding balance, with nothing to
pay if the minimum payment requested is made on time. The Bai Al Inah contract works on
the basis of two akad agreements. The first is the banks agreements to sell an item to the
customer at an agreed price, with the second agreement covering the customer selling back to
the bank at a lower price. The difference is the banks profit on the transaction and is a
predetermined amount. Through a percentage repayment is being made, this differs from
conventional structures in that payment of the minimum balance only does not trigger interest
repayments for the outstanding balance. Just from spending on the card, consumers are also
helping charities via the Ambonus Scheme. For every RM 100.00 spent on the Al Taslif card,
an Ambonus of RM 1 is earned that goes to pay off the annual card fee. Once that fee has
been repaid, however, all future Ambonus points are donated to charities by the bank (Bakshi,



Ambanks Assets

At the (1) the customer who wishes to apply for credit card facility will approach any
counters of AmBank Bank Berhad or AmFinance Berhad. They will complete standard form
and the application will be processed thereon. If the standards requirements are fulfilled by
the applicant, then the process of bay al-inah will commence. (2)AmBank will identify
collective or individual assets owned by Ambank, whereby the market value of the assets is
equivalent to the credit facility. For example if the credit facility worth RM 10,000 then the
value of the identified assets must equivalent to RM10, 000 too. Here the criteria of the
assets or the subject matter under Shariah compliance shall be taken into the considerations
such as:

The subject matter should exist at the time of the contract. However exception is

given to some types of contracts such as Salam, Istisna, Jualah and Ijarah.
The subject matter must be legally owned.
The subject matter should bring benefit or significant result for the contracting

The subject matter should have commercial value.

After that, Ambank will sell the identified assets to the customer. (3)The selling price is the
sum of cost and profit (which is normally quoted in percentage). (4)The next contract will be
executed when the AmBank buys back the asset at cost and cash will be given to the
customer. Customer will then use this cash to buy goods and services using the credit facility
provided (Bakshi, 2006).


The Use of Islamic Credit Cards

HUKM of Credit Card
Halalan toyyiban is a concept that not only measures perceived quality of consumerism but
also extending its application by relevant parties within both the business and consumer

markets. . The concept should be clearly understood both internally and externally for the
benefits of any nation. The credits in general and credit card in particular have become
important instrument for individuals, merchants and banks. The use of a credit card represents
a part of daily activities nowadays; therefore, it has become a duty on the Muslim jurists to
clarify the Islamic legal principle (Al-Takyif) for the card.
There are many questions pertaining to credit cards whether or not Muslim can or
cannot use the credit cards. Some Muslim scholar, it is permissible if certain conditions are
met (Abozaid, 2008). However, there is a large group, which considers conventional cards are
However, there are various areas of interpretation that enable some Muslims to
believe that credit card usage can be done within religious beliefs by paying off the full
outstanding balance every billing month and never rolling over any balance to next statement
period and avoiding cash withdrawals. According to them, by not carrying any outstanding
balance to next billing period and avoiding cash withdrawals, riba can be avoided and thus,
using a card in this way could be halal.
Stating that all deeds are by intention and since the intention is to clear the full
balance every time and not withdraw cash, card is halal can support this argument further.
Contradict with Shaykh Ibn Uthaymeen (may Allah have mercy on him) argues that a
contract of this type is not permissible, because it involves riba which is the price of the card,
and it also means committing to pay interest if payment is delayed (Arifin, 2011).

The Advantages and Disadvantages of Credit Cards
Credit card can be defined as a kind of credit card that was used as substitute cash or with a
name that is popular nowadays, "plastic money". At present there are various types of credit
cards issued as American Express, Master Card, Visa and so on (88.karangan.com,


2013).There are multiple benefits or disadvantages of using credit cards to the public.
Nowadays, it can be owned not only for business man but for government servant too. So
thats it was contribute to high number of credit cards user. Moreover, it becomes popular
among teenagers who are just getting in work (Harian, 2013)
The main advantages of credit card is people did not have to bring their cash in their
pocket because just one swap of card it will be credited to their account. Furthermore, it was
convenient for online shopping that also become popular among user and easier to buy a
flight ticket if people willing to reduce the cost of using their cash. Besides, it will help to
people that does not have sufficient cash and desperation which is had to use their credit card.
For example, the card holder and family members are protected with RM 2 million travel
insurance coverage when full fare of airline tickets are charged to the AmBank credit card
such World MasterCard (AmBank (M) Berhad).
In fact, people was feeling safe to use credit card where there are not vulnerable to
theft or robbery. Usually people more comfortable using credit cards which are lighter than
coins and pliers not contribute to a problem in the future if necessary. Although, in case of
theft the user can contact the bank to restrict the use of their credit cards and they can detect
the use of their credit cards after the credit cards loss. At the same time it can avoid owner of
the credit card borne the charges the cost of the transaction after that case. For example, for
Ambank credit cards holder, the card protection is up to RM 50,000 purchase protection plan
to protect their personal purchases against theft or accidental within 30 days and zero lost
card liability upon reporting (AmBank (M) Berhad).
Despite, when travelling or abroad, users do not need to change the currency. This is
because by use the credit cards it the currency will change automatically which is help to
reduce the cost of time to change the currency to the money changer. Sometimes credit card
user also will get benefits from the places that they went or from the bank of the credit card
itself. For instance, for Ambank credit card holder they will earn 5x AmBonus Points for
overseas spend and get some accommodation benefits like 20% off best available room rates
at all participating Hilton hotels in the Middle East (AmBank (M) Berhad).
Although, there is the disadvantages of credit cards, which is usually user or the card
holder will overspent and they are compelled to spend as they do not use their cash.
Moreover, when there is a discount or sale in any outlet or shopping complex. So that, they


will tend to use the credit cards instead cash which is the credit cards is more convenient for
Besides, spent excessively from this card will cause the card holder a bad debt. This is
because, the amount of credit shall be completed and if the card holder fails to do so the bank
is entitled to charge a high interest rate or fee for Islamic credit card. In addition, bank also
entitled to take a legal action and declared bankrupt when they are failed to pay at maturity
To utilize credit card, it should use a computer and internet moreover at the shopping
complex or any outlet or shop that prepared service for payment by using credit card which is
will send the payment data to the bank. So that was exposed to the possible irregularities in
the transaction. Likewise, the credit card also can be cloned and hacked (88.karangan.com,
Last but not least, the credit card can give the user more benefits but in a rational and
intelligent ways. In addition, know the card amount limit and pay the amount before it
becomes a bad debt to the credit card holder.


Conclusion and Recommendation

For the future recommendation, first we will look on the consumerism matter. The Islamic
bankers should implement policy that can avoid the consumerism matter. As for example,

one policy that can be made is by implementing the mechanism that can offer Islamic credit
cards only for those persons who have certain level of income should be applied. This is
regarding the use of the card can be supported with the ability to pay back. This policy
actually can reduce the credit risk that faced by any Islamic bank which issued credit card.
Second recommendation is the Islamic credit card concept is subject to further development.
The development of Islamic credit card should be include the strategies of using the Islamic
credit card on a single platform, structuring the international shariah compliant credit card
and to develop the Islamic credit card growth opportunities by fostering the use of technology
and increasing the usage security.
In conclusion, Islam accept the role of credit card as a medium of payment as it does
not contravene with principle of Shariah and under thr doctrine of Masalih Al-Mursalah it
give comfortable life to Muslim community in term of socio economy and practicality of Bai
Al Inah in the modern era. Islamic credit card is issued by the Islamic banks especially to
meet the need of Muslim customers to make transactions without holding any cash on hand.
In the Islamic credit card transaction, there will be applied an Bai Al-Inah, Al-Wadiah and
Qard Hul Hassan concept. The concepts of the Islamic credit card are the credit card is based
on the Shariah contracts which free from the riba, gharar and maysir, fixed profit margin, zero
percent interest on easy payment plan and low profit rate on the outstanding balance. The
concepts use actually will benefits of the Islamic credit card and can encourage the Muslim
and Non Muslim customers to embrace the Islamic credit cards.

88.karangan.com. (14 ocktober, 2013). Retrieved 26 april, 2015, from 88.karangan :

AmBank (M) Berhad. (n.d.). Retrieved 26 April , 2015, from AmBank (M) Berhad:
Bakshi, A. M. (2006). Developing a financial model for Islamic credit card for UK. Islamic
Bank of Britain Department, 1-41.
Group, A. (4, 2015). AmBank Group Your Bank Malaysia's Bank Ambank. Retrieved 2015,
from credit card:
Gupta, L. (2012). RM Application Sdn. Bhd. Retrieved 20 April, 2015, from RM Application:
Harian, B. (5 August, 2013). AKPK. Retrieved 27 April, 2015, from AKPK:
Niringjuerae, M. (n.d.). Credit Card from Shariah Perspective. International Islamic
University Malaysia, 1-21.
Abozaid, D. (2008). Credit card from Shariah Perspective. The Interntional Islamic Finance
Forum. Dubai.
Arifin, A. (2011). Credit Cards From Shriah Perspective. Islamic Jurisprudence, 3-23.