prohibited. Thus, apart from preventing the card holder to access sites such asonline gambling, Islamic cards need some other form of insurance cover.Secondly, an Islamic credit card must have certainty to be acceptedwidely. It has to use international payment schemes, such as MasterCard or Visa.Besides that, the card should provide facilities that are not available on debit cardssuch as CVV numbers for “card not present” transactions and hold amounts.Furthermore, the merchant charges and issuer’s fees should not be withheld.Thirdly, an Islamic credit card should not encourage behavior that isconsidered
. This includes all manner of forbidden behaviors andtransactions of an inappropriate nature.To look forward on the application of Islamic credit card, this paper willdiscuss the practice of Islamic credit cards in Malaysia and Indonesia, by taking acloser look on BI Card which is issued by Bank Islam Malaysia Bhd and DirhamCard which is issued by PT. Bank Danamon Tbk. Further, this paper will alsoexamine the Economic and
Issues pertaining to the credit cards asimplemented by the banks, and will identify problems, opportunities andchallenges surrounding the products offering.
III. The Practice of Islamic Credit Card in Malaysia
of July 2003, Bank Islam Malaysia Bhd has issued a
compliantcredit card named Bank Islam Card (BIC). This first Islamic credit card inMalaysian market was issued to response the need of its Muslim clients. It is alsothe first credit card in Southeast Asia adopting the Europay-Mastercard-Visa(EMV) Smart Card with the “chip” technology. The card has all features aspayment instrument, however, profit rate is only charged to clients who fail to payback the minimum repayment within the 20 days grace period.
III.1. Details of the Bank Islam Card
The holders of the card are only permitted carry out
transactions, whichexclude transactions related with six categories that don’t meet
requirements. These categories are bars, discos, night clubs, purchase of beers,2