Sunday, 30 January 2011

The essentiality of Islamic credit cards

Bismillahirohmanirohim (In the name of Allah, the Most Merciful and the Most Compassionate)

Credit card is being used commonly in this point in time. As we know credit card originates from the conventional banking which allows one to use money in advance and pay it by installments from time to time with additional interest charges. So the first question will be that does Islamic credit cards exists? How does it exist without charging interest?

Technology and human intelectual have allowed us to use these credit cards avoiding the usage of interest. In Malaysia it is based on Bay al inah principle. I have mentioned earlier in one of my entries that Bay al inah is only commonly used in Malaysia and not in other Islamic countries. I have explained a little on Bay al inah in my previous entry.

So the things that were haram is being elevated and becomes halal. From my perspective is that, Islamic banking shouldn't always be associated with technical terms just to justify that it is halal. Islamic banking should always be associated with good morality, caringness and especially fear towards the Creator for any misconduct. One of the reason that Allah has prohibited interest/usuury is because it will lead to oppression as I have mentioned earlier in my other entry. If one were to calculate for example £1 is borrowed at 5%1000 years, the new total would be £1,546,318,920,731,950,000,000. Look at the big difference! Logically no one would make a loan for 1000 years but a person would apply for a loan for thousands or millions of £ in a shorter time length. So I don't think it is it fair to be paying and earning interest because one will have a problem of paying the loan and the person who earns the interest will receive money based on time. This is the kind of oppression  that I am focusing on which is the rich will always/easy become rich and the poor will remain poor.

So, is Islamic credit card in line with the values of Islam as it is certainly has nothing to do with interest? I will be focusing more on the values and morality rather than the technicality of the credit card. It is obvious that risk management is important especially in banks as it involves or deals with huge sum of money everyday. Therefore, banks will only approve credit cards to those who are 'reliable'. 'Reliable' in this sense would mean those who can afford. People who can afford to pay their credit cards will reduce the risk of banks not getting paid for their services, meaning banks are assured payment every month. So, what happens to those who can't afford? Here, one can see that there is a difference between those who are rich and those who are less capable financially. Those who are financially capable would feel easy to get/earn/use more money as they have more privileged, whereelse the less capable are blocked to use these credit cards. In my opinion, this is a kind of oppression, whereby the rich is given the privilage/advantage when actually the poor are in need of the money. One could identify here that the wealth distribution is not being observed in a proper manner. When wealth distribution is not properly observed, it will cause an economical imbalance. It will also cause differences in status between the rich and poor which is not in line with Islamic values.

I have spoken to some who have knowledge on Islamic banking concerning this issue and their reply to me is that there are other forms of financial instruments or facility for the poor to use. These other financial instruments or facility will require one to start a business or equity financing which is  totally different from credit card as it is not an 'easy loan'. Hence, the less capable is being segregated from using credit cards.

These credit rating are causing oppression towards the poor because of them being less capable financially. If one were to refer the history when John Calvin, a pastor who broke from the Roman Catholic Church because of the usage of usury/interest. His interpretation of the bible on usury/interest was that, it was 'ok' to charge interest towards the rich but not to the poor as there will be no oppression to the poor. What he did not realise was that it will cause an economical imbalance and segregation between the rich and the poor which also is a kind of oppression. Consequently, my opinion is that even if Islamic credit card is technically halal, morally it is no difference with  John Calvin's understanding of oppression.

Usury in bible : "If thou lend money to any of my people that is poor by thee, thou shalt not be to him as and usurer, neither shalt thou lay upon him usury." (Exodus 22:25)

Technology have changed our lives and personally I don't see the need for Islamic credit cards. We now have debit cards which is convenient to use and it deducts straight from the account. Some banks have also allowed overdrafts which means, one could use a certain amount even if one did not have the money in the account. The banks will only charge an adminstration fee after a certain amount of time which is not usury/interest because the amount is fixed. Therefore, from my personal point of view, Islamic credit card is not an essential financial instrument as seeing it in the term of Islamic values.

Saturday, 1 January 2011

Did I really have a happy new year?

Bismillahirohmanirohim (In the name of Allah, the Most Merciful and the Most Compassionate)

It is already 2011 and I can see from my joint account that there are many who celebrate the new year and a lot of new resolutions for the new year. As of course, I was also one who celebrates new year and making new 'resolutions', but as time passes by I do not really understand what is the celebration about.

From my personal observation, it is to celebrate the completion cycle of time, and the coming cycle of new time. Time is the circulation of the earth, moon and sun. I include the moon because in my opinion it is part of earth. Anyway as I've said earlier, time is the circulation of the earth, moon and sun, so do we celebrate the completion of the cycle? What is so special of the completed cycle? How are we so sure that the next cycle will be complete to make the next resolution?

In the perspective of a muslim, it feels as if we're like pagans celebrating upon the sun and moon. From my personal opinion, the reason Allah created the sun and moon so that time can be easily assigned. Why is it important for time to be assigned? So that it could be filled with actions/assignments/things to do. Time is a measuring tool, it is used to measure the time of prayers, the time to break our fast, time to go for appointments/meetings and etc.

I think it is clear that time is a measuring tool, I am going to give an example, which is unconventional somehow relates to measuring tool. For example, a measuring cup is used to be filled with things(i.e flour) to bake a cake. After baking the cake, one celebrate(enjoy/taking pleasure) by eating the cake. One do not celebrate on the measuring cup itself. We don't really celebrate on the things we have done during the cycle. It is common to see a person says "thanks 2010 for the good and bad experience". We're giving credit(thanks) wrongly. Should we give thanks to time or giving thanks to the giver/creator of time?

In my opinion, the completion cycle of the earth, moon and sun is not necessarily important. The important cycle is the cycle of ones life. Referring to the example of baking the cake, let us celebrate eating a sweet delicious cake at the end. So let us celebrate our actions in the hereafter after our life cycle ends. 

"By the Time(1), Indeed all of mankind is in a state of loss (2), except those have iman, Conduct righteous actions, call each other to the Truth, And call each other to having patience.(3)" (Surah al-asr verse 1-3)

"Our Lord! We have now seen and heard , so send us back; we will do good - we do indeed (now) have firm faith!" (Surah as sajada verse 12)
But their pleas will be answered with only: "Did We not grant you a life long enough for him who would reflect to reflect (and so take heed)? And there came to you the warner (too); therefore taste now (the punishment), for the unjust have no helper" (Surah al Faatir verse 37)

"Nay, but you give preference to the life of this world (16), while the Hereafter is better and more lasting(17)" (Surah al A'laa verse 16-17)

"O mankind, indeed the promise of Allah is true, so let not this present life deceive you, nor let the great fraudster deceive you about Allah!" (Surah al Faatir verse 5)

"And be not like those who forgot Allah, so He caused them to forget their souls. It is these that are the evil-does" (Surah al Hashr verse 19)