Credit Card: Islamic & Conventional

2107 Words9 Pages
INTERNATIONAL ISLAMIC UNIVERSITY MALAYSIA ACC 2001 INTERMEDIATE ACCOUNTING SEMESTER 3 (2010/2011) GROUP ASSIGNMENT ISLAMIC CREDIT CARD & CONVENTIONAL CREDIT CARD INTRODUCTION Credit card is known as plastic money as it is used in making payment nowadays. It is true that credit card is the major pillar of consumerism since it encourages people to spend even if they do not have money. There are some reasons on why people use credit card rather than cash in hand which are to obtain credit facility, cash advance, easy payment, charge card and prestige. It has becoming a way of life in the society currently that different types of credit card such as master and visa credit card with category of gold or platinum come to existence in which to represent the wealth and status of a person. How credit card works? Credit card is issued by a credit card issuer which is usually a bank. After an account has been approved by the credit provider, then the cardholder can use it to make purchases at merchants who accepting that card. Merchants will advertise which cards they accept by displaying acceptance marks or may communicate orally. When a purchase is made, the credit card user agrees to pay the card issuer. The cardholder indicates consent to pay by signing a receipt with a record of the card details and indicating the amount to be paid. The consent can also be done by entering a personal identification number (PIN). There are also many merchants now accept verbal authorization through telephone and electronic authorization using the Internet which is known as a card not present (CNP) transaction. Islamic finance institutions is prohibited to issue credit card where such issuance is based on the contract granting the credit cardholder the right to revolve credit terms that involve interest or riba since it is prohibited in term of taking or giving something

More about Credit Card: Islamic & Conventional

Open Document