Credit Cards and Shariah Compliance in Saudi Arabia

The fundamental difference is in how the bank makes money when you carry a balance.

Conventional cards charge interest (riba) directly on unpaid balances. This is considered haram by Islamic scholars.

Islamic cards use Shariah-approved structures:
• Tawarruq: The bank buys a commodity on your behalf, sells it at a markup, and gives you the cash. When you carry a balance, the 'profit charge' is the markup, not interest. The underlying transaction involves a real asset.
• Murabaha: Similar to tawarruq but the bank buys something you want directly and sells it to you at a disclosed markup, payable in installments.

Both structures are approved by Shariah boards of Saudi banks, though some scholars debate their practical equivalence to conventional interest.

Important: Even Islamic cards charge late payment fees and have profit rates. The Shariah compliance is in the structure, not in making credit free.

1. Check the bank's website. Islamic cards are always labeled as such — look for 'Shariah-compliant,' 'Islamic,' or the name of the Shariah board.

2. Ask for the fatwa. Every Islamic banking product should have a fatwa (religious ruling) from the bank's Shariah board. You can request this document.

3. Read the terms. Islamic cards should reference 'profit rate' (not 'interest rate') and describe the underlying structure (tawarruq/murabaha).

4. SAMA registration. All credit cards in Saudi Arabia, whether conventional or Islamic, must be registered with SAMA. This doesn't guarantee Shariah compliance but ensures regulatory oversight.

5. Use Mustafeed's filter. On our cards listing page, you can filter by 'Islamic Compliant' to see only cards that banks have certified as Shariah-compliant.