Assalamu Alaikum. Recently Qatar Islamic Bank has introduced new credit card which they believe that is Shariah Compliance. I want to get clarification from your good self whether it really does compliance with Islamic Shariah. This card allows you to do cash withdraw upto 20000/- without any interest charged on it, accept 3% commission on the very first action of withdrawing 20000/-. Thereafter you need not pay any interest for installment of 1 year. But then there is one condition which they termed as Service charges and that is Qr.125/- every month to be paid to the bank. This Qr.125/- has to be paid to the bank irrespective of whether you do any transaction or not you continue paying life long till the time you carry the card in your wallet. This they say service charges for the use of this credit card. This service charge to me seems to more exhorbint charges, which accounts to Qr.1500/- per year plus what is the defination of commission of 3 % on cash withdrawal. A single dirham charged will be considered as riba. Then how this card is shariah compliance. Please advice.

All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad is His slave and Messenger. We ask Allaah to exalt his mention as well as that of his family and all his companions.

We have already clarified before the conditions of using the credit cards in a permissible way according to the resolutions of the Fiqh Committee, and we mentioned that it is permissible for the card issuing body to take service charges. These charges do not change if the withdrawn amount is greater. As regards putting a percentage on a withdrawn amount by the card, then this is in itself Ribaa (interest or usury).

For more benefit, please refer to Fatwa 84519.

Allaah Knows best.