Best Islamic Credit Card in Malaysia 2023
In Malaysia, the Islamic credit card was first launched by Bank Islam
Noorhidayah binti Mohd Saad,
Malaysia in 2003, namely Bank Islam Card (BIC) used bay’ al-inah as a contract. Fast forward to April 2009, HSBC Amanah launched the first Islamic credit used ujrah as a contract, namely MPower Credit Card-i. This paper attempts to discuss, compare and analyze the position of contracts for Islamic Credit Cards adopted by the Islamic Bank in Malaysia.
Project Paper Submitted to the Ghazali Shafie Graduate School of Government, Universiti Utara Malaysia in Fulfilment of the Requirements for the Degree of Master of Law
(BIC) introduced by Bank Islam Malaysia Berhad (BIMB).
Islamic credit cards, also known as Sharia–compliant credit cards, and conventional credit cards have distinct differences based on their underlying principles and features. Here are some key differences between the two:
Interest (Riba) vs. Profit-Sharing (Mudarabah or Wakalah):
Islamic Credit Cards: Islamic principles prohibit the charging or payment of interest (riba). Instead of riba, Islamic credit cards operate on the basis of profit-sharing arrangements (Mudarabah or Wakalah) between the card issuer and the cardholder. The cardholder shares a portion of the profits generated from the usage of the card with the issuer.
Conventional Credit Cards: Conventional credit cards involve the charging of interest on outstanding balances that are not paid off within the grace period. Cardholders are required to pay this interest on top of their outstanding balances.
No Interest-Based Transactions:
Islamic Credit Cards: All transactions that involve interest-bearing activities, such as borrowing or lending money with interest, are prohibited in Islamic finance. Therefore, Islamic credit cards are designed to be interest-free and compliant with Sharia principles.
Conventional Credit Cards: Conventional credit cards rely on interest charges as a primary means of revenue for the card issuer. Cardholders who don’t pay off their balances in full are subject to these interest charges.
Transaction Structures:
Islamic Credit Cards: Transactions are structured as deferred payment transactions. The cardholder is expected to pay the outstanding balance in full by a specified due date to avoid any late payment fees or penalties.
Conventional Credit Cards: Transactions involve revolving credit, allowing cardholders to carry forward a balance from one month to the next. Interest is charged on the unpaid balance if not paid in full within the grace period.
Late Payment Charges and Penalties:
Islamic Credit Cards: Late payment fees are typically charged as a form of compensation for delays in payment. These fees are not intended to be punitive.
Conventional Credit Cards: Late payment fees and penalties are often used as a means to encourage timely payments and generate additional revenue for the issuer.
Cardholder Benefits and Rewards:
Islamic Credit Cards: Cardholder benefits and rewards are structured in a way that aligns with Islamic principles. For instance, rewards may include discounts on halal goods and services, donations to charitable causes, or travel benefits that adhere to Sharia guidelines.
Conventional Credit Cards: Conventional credit cards offer a variety of rewards, such as cashback, airline miles, and discounts. These rewards are often based on the amount of spending and may involve partnerships with various vendors.
Transparency and Disclosure:
Islamic Credit Cards: Transparency and clear disclosure of terms are emphasized to ensure that cardholders understand the nature of the profit-sharing arrangement and other features in compliance with Islamic principles.
Conventional Credit Cards: While conventional credit cards also require disclosure of terms, the focus may differ, and the emphasis may be on interest rates, annual fees, and other charges.
Here is the list!
1. HSBC Amanah MPower Platinum Credit Card-i
| Monthly Income | Annual Fees | Rewards |
|---|---|---|
| RM3,000 | FREE | Grab up to 8% cashback on petrol, groceries and eWallets for monthly spending above RM2,000. Get an extra 0.2% cashback on all other spending with an RM15 cap per category. Maximise your cashback by getting your loved ones a supplementary card! |
2. HSBC Amanah Premier World Mastercard Credit Card-i
| Monthly Income | Annual Fees | Rewards |
|---|---|---|
| RM3,000 | FREE | Get 1% cash back on all your overseas shopping purchases, and 0.5% cash back when you spend locally with no annual fees charged. Enjoy 6x complimentary access to participating Plaza Premium Lounges in KLIA, Hong Kong International Airport and Singapore Changi Airport. HSBC Balance Transfer Instalment offers 0% interest and low upfront fees for up to 12 months. |
3. Bank Islam Gold Visa Card-i
| Monthly Income | Annual Fees | Rewards |
|---|---|---|
| RM2,000 | FREE |
Spend with your Bank Islam Gold Visa Islamic credit card and earn 1x TruPoint for every RM1 spent. Applicable for both local and overseas transactions. . |
4. BSN Platinum MasterCard Credit Card-i
| Monthly Income | Annual Fees | Rewards |
|---|---|---|
| RM4,000 | FREE | Earn 1 Happy Rewards Point for every RM1 when you swipe with this credit card and double the points when you swipe overseas on retail spending. Get complimentary travel and accident takaful coverage of up to RM300,000. Plus, you will get a complimentary BSN Zing PLUSMiles, a Touch ‘n Go card that auto reloads RM100 |
5. Public Islamic Bank MasterCard Gold Credit Card-i
| Monthly Income | Annual Fees | Rewards |
|---|---|---|
| RM2,000 | FREE | Earn 2% cashback on grocery purchases, credited into your account every month, capped at RM30 per monthly statement cycle (combined between Principal and Supplementary accounts). |
6. RHB Islamic Cash Back Credit Card-i
| Monthly Income | Annual Fees | Rewards |
|---|---|---|
| RM2,000 | FREE | A credit card that meets your daily needs – up to 10% cashback every month when spending on petrol, dining, utility, online and grocery delivery! |
7. Bank Rakyat Gold Credit Card-i
| Monthly Income | Annual Fees | Rewards |
|---|---|---|
| RM3,000 | FREE | Rakyat Rewards! 1 point for every RM10. Points are converted to cash at the rate of RM0.10 per 10 points. Earn as much as 3.0% of Profit Rebate on Auto Debit facility, Bank Rakyat loan facility and more. Use your Bank Rakyat credit card to enjoy zero additional fees on currency exchange for overseas transactions (0% markup rate) when travelling. |
8. CIMB Islamic MasterCard Platinum
| Monthly Income | Annual Fees | Rewards |
|---|---|---|
| RM2,000 | FREE | Enjoy great rewards whenever you spend with your CIMB Islamic Platinum Mastercard Credit Card. Best of all, combine your Principal and Supplementary credit cards’ Bonus Points to redeem attractive gifts and benefits for you and your loved ones. Charge your full airline fare(s) to CIMB Islamic Platinum Mastercard Credit Card and get automatically covered with a Travel Takaful Coverage for up to RM1 million, in addition to travel inconvenience benefits for RM1,000 per one occurrence. Terms and conditions apply. |
9. Maybank Islamic MasterCard Ikhwan Gold Card
| Monthly Income | Annual Fees | Rewards |
|---|---|---|
| RM2,500 | FREE | arn a 5% cash rebate on petrol and groceries every Friday and Saturday. The maximum cap is set at RM50 per month for Principal card members only. 1 point on every RM1 on all local and overseas retail (except petrol and groceries spend on Friday and Saturday. 1 point on every RM1 on education, insurance, utilities and 0% EzyPay Instalment |
10. AmBank Islamic Visa Platinum Card-i
| Monthly Income | Annual Fees | Rewards |
|---|---|---|
| RM2,000 | – RM0 primary card Free for life – Free for life for first 3 Supplementary cards, 4th Supplementary card onwards RM188 p.a. | – 2 points on every RM1 on all overseas retail expenses (except for online transactions) – 1 point on every RM1 on all local retail expenses – Get covered with a travel Takaful of up to RM500,000 annually when you purchase flight ticket(s) with an AmBank Platinum credit card. |
Final Say
Now that you know which Islamic credit cards in Malaysia you can consider applying for. And remember, Islamic credit cards are open to those from all faiths!
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