Potential Jurisprudential Adaptation for the Tripartite Credit Card Transaction from an Islamic Perspective

In: Arab Law Quarterly
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  • 1 Faculty of Law, National University of Malaysia (UKM), Malaysia
  • | 2 Faculty of Law, National University of Malaysia (UKM), Malaysia
  • | 3 Faculty of Law, National University of Malaysia (UKM), Malaysia
  • | 4 Lecturer Associate Professor

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The credit card represents one of the most important financial instruments at present. The credit card concept originated and was developed in the West under the rules of conventional law. Over time the credit card has invaded the Islamic markets. A credit card transaction does not fall under any of the known financial contract categories in Islamic principles. Therefore, determining the Islamic rulings and finding a jurisprudential adaptation for such credit card transactions is essential for clarifying relevant jurisprudential rulings, as one cannot specify whether a specific transaction is permitted or prohibited without a jurisprudential adaptation on the matter. Islamic researchers have taken great effort to clarify the jurisprudential adaptation of a credit card transaction. This article will examine the potential legitimate nature of the credit card transaction in order to determine Islamic rulings. The concept ‘credit card’ originated in the West and developed under the rules of conventional law. Although credit cards have since invaded the Islamic markets, their transactions do not fall under any of the known categories for Islamic financial contracts; therefore, one must determine the Islamic rulings that relate to such transactions. Islamic scholars have exerted much effort to find a jurisprudential adaptation for the credit card transaction, which is essential in order to clarify jurisprudential rulings on transactions and to specify whether a transaction is permitted or prohibited. This article examines the potential legitimate nature of the credit card transaction in order to determine the Islamic rulings.

  • 1

    See Comment, “Credit cards”, Northwestern University Law Review 57/2 (1962) 207; Donald H. Maffly and Alex C. McDonald, “The tripartite credit card transaction legal infant”, California Law Review 48 (1960) 469; Robin Edwards, “Does law follow money”, Bond Law Review 21/1 (2009) 9; Steve Cornelius, “The legal nature of payment by credit card”, S. Afr. Mercantile Legal Journal, 15 (2003) 153; Peter E. Sayer, Credit Cards and the Law: An Introduction, (London: Fourmat Publishing, 1988); Graham Stephenson, Credit, Debit, Cheque Cards; Law and Practice, (uk: Professional Publishing, 1993); Aubrey L. Diamond, Commercial and Consumer Credit: An Introduction (London: Butterworths, 1982), pp. 325.

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  • 3

    See Maffly & McDonald, supra note 1, at 469; L. Tyree, New Zealand Banking Law (Wellington: Butterworths, 1987), p. 368; Edwards, supra note 1, at 9; Comment, supra note 1, at 207; W.J. Chappenden, “Credit cards: Some legal problems”, Australian Law Journal 48 (1974) 308.

  • 4

    See R.M. Goode, Consumer Credit Law (London: Butterworths, 1989), p. 67; Sayer, supra note 1, at 9; Robert Bradgate and Nigel Savage, Commercial Law (London: Butterworths, 1991), pp. 349; Diamond, supra note 1, at 328.

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  • 5

    [1986] All English Law Reports, p. 289.

  • 11

    Abdul Ghafar Ismail, Money, Islamic Banks and the Real Economy (Malaysia: Cengage Learning, 2010), p. 82.

  • 12

    Hossam Elsefy, Islamic Financial; A Comparative & Jurisprudential Study (Malaysia: University of Malaya Press, 2007), p. 4.

  • 15

    Abu Suleiman, supra note 8, at 180.

  • 17

    Ibid., p. 629; Abu Suleiman, supra note 8, at 187; Al-Ba’ali, supra note 13, at 711; Elsefy, supra note 12, at 176.

  • 18

    Qur’ān, Yusuf 12:72.

  • 21

    Qur’ān, Al-Baqarah 2:185.

  • 22

    Qur’ān, Al-Hajj 22:78.

  • 23

    Mohammed Bin Ali al-Qari, Al-I’timān al-Mualad ‛alahi Shakīl Biṭāqah, p. 589. See also the following: Hassan al-Jawahiry, ‘Biṭāqāt al-i’timān’, Journal of Islamic Fiqh Academy 8/2 (1415 h/1994 ce) 615; Al-Ba’ali, supra note 13, at 712.

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  • 26

    Ibid., p. 712.

  • 27

    Elsefy, supra note 12, at 3.

  • 29

    Al-Atram, supra note 13, at 77.

  • 30

    Abd al-Hakim Ahmad Mohammed Othman, Aḥkām al-Biṭāqāt al-I’timāniah fī l-Qānūn wa l-‘Ar’a l-Fiqhiyyah al-Islāmiyyah, p. 307.

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  • 31

    M. Tahir Mansuri, Islamic of Contracts and Business Transactions (New Delhi: Adam Publishers, 2006), pp. 298.

  • 32

    Ibid., p. 298; Othman, Māhiyyat, supra note 10, at 629; Al-Atram, supra note 13, at 77.

  • 33

    See Resolution, supra note 24; Thirdly: using credit cards for drawing cash results in a loan from the issuer to the cardholder.

  • 34

    Mansuri, supra note 31, at 301.

  • 39

    See also, Kante, supra note 10, at 31.

  • 40

    Mansuri, supra note 31, at 305.

  • 42

    Ibid., p. 305.

  • 47

    Mansuri, supra note 31, at 302; supra note 35, at 61, 77, 87; Al-Atram, supra note 13, at 77.

  • 48

    Al-Ba’ali, supra note 13, at 727.

  • 49

    Al-Masri, supra note 37, at 411.

  • 50

    Mansuri, supra note 31, at 302; supra note 35, at 61, 77, 87; Al-Atram, supra note 13, at 77.

  • 53

    Al-Jawahiry, supra note 23, p. 621; Al-Ba’ali, supra note 13, at 727.

  • 54

    Umar Sulaiman al-Ishqar, Drasah Shar’iah fī l-Biṭāqāt al-I’timāniyah (Jordan: Dār An-Nafaes, 2009), p. 133.

  • 56

    Mansuri, supra note 31, at 59.

  • 58

    Abu Suleiman, supra note 8, at 195.

  • 59

    Ibid., p. 192.

  • 60

    Al-Ba’ali, supra note 13, at 728.

  • 61

    Abu Ghuddah, supra note 57, at 366.

  • 62

    Edwin Peel and Guenter H. Treitel, The Law of Contract (Andover: Sweet & Maxwell Ltd., 2011), pp. 709.

  • 63

    Abu Ghuddah, supra note 57, at 366; Al-Ba’ali, supra note 13, at 729.

  • 65

    Mansuri, supra note 31, at 62.

  • 69

    Abu Suleiman, supra note 8, at 136.

  • 71

    Abu Suleiman, supra note 8, at 149.

  • 73

    Abu Suleiman, supra note 8, at 149. See also, Al-Jawahiry, Aqradiah, supra note 25, at 120.

  • 74

    Al-Zuhayli, supra note 9, at 55.

  • 75

    Al-Masri, supra note 37, at 411.

  • 77

    Al-Masri, supra note 37, at 411.

  • 79

    Al-Darir, supra note 57, at 21; Resolution, supra note 24.

  • 81

    Goode, supra note 4, at 67.

  • 82

    Al-Qari, supra note 23, at 589. See also the discussions of the Islamic Fiqh Academy for the Twelve Session, p. 21.

  • 84

    Al-Qari, supra note 23, at 589. See also the following: Al-Jawahiry, Aqradiah, supra note 25, at 120; Al-Ba’ali, supra note 13, at 730.

  • 85

    See Stephenson, supra note 1, at 143; Joan Wadsley and G.A. Penn, Banking Law: The Law Relating to Domestic Banking, Vol. 1 (Sweet & Maxwell, 2000), p. 480; Dennis Rosenthal, Consumer Credit Law and Practice: A Guide, Bloomsbury Professional, London, 2008), p. 187; Sayer, supra note 1, at 86.

  • 89

    Nazih Hammad, Qathaiah Fiqhiah Mu’asrah fi l-Mal wa l-Aqtisad, (Damascus: Dār al-Qalm, 2001), p. 146.

  • 92

    Othman, ibid., p. 631.

  • 96

    Al-Masri, supra note 37, at 411; Abu Suleiman, supra note 8, at 186.

  • 97

    Abu Suleiman, ibid., p. 190.

  • 98

    Ibid., p. 191.

  • 103

    Arafat, supra note 83, at 104.

  • 107

    Al-Atram, supra note 13, at 78; Al-Jawahiry, supra note 23, at 621; Al-Ba’ali, supra note 13, at 735.

  • 108

    Al-Sanhuri, supra note 55, at 597.

  • 109

    Al-Zuhayli, supra note 9, at 57.

  • 111

    Abu Ghuddah, supra note 57, at 633.

  • 112

    Al-Ba’ali, supra note 13, at 733.

  • 114

    Ibid., p. 57;Abu Suleiman, supra note 8, at 193-197.

  • 115

    Abu Suleiman, Ibid., p. 197; Al-Zuhayli, supra note 9, at 58; Kante, supra note 10, at 41.

  • 116

    Al-Ba’ali, supra note 13, at 733.

  • 118

    Mansuri, supra note 31, at 62; Othman, ibid., p. 272.

  • 119

    Al-Zuhayli, supra note 9, at 58.

  • 121

    Abu Suleiman, supra note 8, at 247.

  • 122

    Kante, supra note 10, at 44; Othman, Aḥkām, supra note 30, at 314.

  • 123

    Al-Ba’ali, supra note 13, at 732.

  • 124

    Mansuri, supra note 31, at 223.

  • 126

    Al-Qari, supra note 7, at 590.

  • 128

    Al-Qari, supra note 7, at 590; Al-Ba’ali, supra note 13, at 731.

  • 129

    Al-Atram, supra note 13, at 77.

  • 132

    Al-Masri, supra note 37, at 411.

  • 133

    Abu Suleiman, supra note 8, at 131, 179, 192.

  • 134

    Al-Atram, supra note 13, at 77.

  • 135

    Al-Darir, supra note 57, at 17.

  • 137

    Abu Suleiman, supra note 8, at 192; Abu Ghuddah, supra note 57, at 366; Al-Jawahiry, supra note 23, at 623.

  • 139

    Al-Jawahiry, supra note 23, at 623.

  • 140

    Abu Suleiman, supra note 8, at 192.

  • 141

    Ibid., p. 199.

  • 143

    Mansuri, supra note 31, at 62.

  • 146

    Al-Atram, supra note 13, at 77.

  • 147

    Al-Darir, supra note 57; supra note 35, at 86.

  • 149

    Al-Atram, supra note 13, at 77; Al-Zuhayli, supra note 9, at 55; Kante, supra note 10, at 32.

  • 150

    Al-Sanhuri, supra note 55, at 597; Al-Ishqar, supra note 54, at 133.

  • 151

    Al-Ishqar, ibid., p. 136.

  • 153

    Al-Qari, supra note 23, p 589.

  • 154

    Abu Suleiman, supra note 8, at 181.

  • 162

    Abu Suleiman, supra note 8, at 185; Al-Ishqar, supra note 54, at 139.

  • 163

    Al-Ishqar, ibid., p. 138.

  • 164

    Mansuri, supra note 31, at 298.

  • 165

    Abu Suleiman, supra note 8, at 190.

  • 166

    Ibid., pp. 136-143.

  • 168

    Ibid., pp. 139-140.

  • 169

    Ibid., pp. 21-48.

  • 170

    Al-Qari, supra note 23, at 589. See also, the discussions of Islamic Fiqh Academy for the Twelve Session, p. 21.

  • 172

    Abu Suleiman, supra note 8, at 144; Kante, supra note 10, at 56; Abu Ghuddah, supra note 57; supra note 35, at 25; Muhii al-Dein al-Qarahdaqi, in supra note 35, at 64; Ali al-Salws, supra note 35, at 79; Al-Jawahiry, Aqradiah, supra note 25, at 117.

  • 173

    Abu Suleiman, supra note 8, at 144; Kante, ibid.; Abu Ghuddah, ibid.; supra note 35, ibid., at 25; Al-Qarahdaqi, ibid., p. 64, Al-Salws, ibid., p. 79; Al-Jawahiry, ibid.

  • 176

    Kante, supra note 10, at 50.

  • 177

    Ibid., p. 50; Othman, Ahkām, supra note 30, at 364.

  • 179

    Abd al-Hamid Mahmud al-Ba’ali, Ḍawābṭ al-Aqwad fī al-Fiqh al-Islāmī, (Cairo: Maktabat Wahbah, 1905), p. 284.

  • 181

    Al-Zarkashī, supra note 175, at 320; Mansuri, supra note 31, at 75; Al-Zuhayli, supra note 178, at 123.

  • 183

    Al-Zuhayli, supra note 178, at 127; Mansuri, ibid., at 81.

  • 184

    Al-Ba’ali, supra note 179, at 284.

  • 185

    Mansuri, supra note 31, at 75.

  • 186

    Abu Suleiman, supra note 8, at 160; Kante, supra note 10, at 50.

  • 188

    Al-Ba’ali, supra note 179, at 298.

  • 189

    Abu Suleiman, supra note 8, at 160; Al-Jawahiry, supra note 25, at 117.

  • 191

    Abu Suleiman, supra note 8, at 162.

  • 192

    Al-Masri, supra note 37, at 409; Al-Qari, supra note 7, at 381; Al-Jawahiry, supra note 25, at 615; Hammad, supra note 89, at 151.

  • 193

    See Resolution, supra note 24.

  • 195

    Al-Qari, supra note 23, at 596.

  • 196

    Abu Ghuddah, supra note 57, at 366; Al-Zuhayli, supra note 9, at 9.

  • 197

    Al-Masri, supra note 37, at 410; Al-Zuhayli, ibid., p. 9; supra note 35, at 676.

  • 198

    Al-Zuhayli, supra note 35, at 669.

  • 199

    Kante, supra note 10, at 60.

  • 200

    Abu Suleiman, supra note 8, at 155.

  • 206

    See Resolution, supra note 24.

  • 209

    Abu Suleiman, supra note 8, at 157.

  • 213

    See Resolution, supra note 24.

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