3.2.1. Overdrafts/Credit Cards etc. Conventional banks offer the facility of overdrawing from account of the customer on interest. One of its form is use of credit card whereby limit of overdrawing for customer is set by the bank. Credit card provides dual facility to customer including financing as well as facility of plastic money whereby customer can meet his requirement without carrying cash. As for facility of financing is concerned that is not offered by Islamic banks except in the form of Murabaha (which means IFI shall deliver the desired commodity and not the cash) however facility to shop/meet requirement is provided through debit card whereby a customer can use his card if his account carries credit balance. Under conventional banking a customer is charged with interest once the facility availed however under Murabaha only profit is due when the commodity is delivered to the customer. Furthermore in case of default customer is charged with further interest for the extra period under conventional system however extra charging is not allowed under Murabaha.
(Vol. 2 No. 2; February 2011, pg 170, Differences and Similarities in Islamic and Conventional Banking Muhammad Hanif)
Credit cards can offer certain advantages to the holder. Firstly, they provide easy means of obtaining credit for an interest free credit period from a week to a mouth. Secondly, credit card can easily be used to withdraw cash over the counter or from an Automated machine (ATM).Furthermore, credit card may also offer the holder an additional protection such as, in the event of loss, damage or theft of an item bought by the card holder, he may be indemnified under the insurance.6 And with the development of high technology and the internet, credit card also allow their holders to purchase goods from anywhere around the world over the phone or online.
Nevertheless, there are