Glossary
Ijarah
A lease: renting the use of something, or someone's services, for a fee.
إجارةijārah
Ijarah is the hire of an asset's usufruct or of a service. AAOIFI covers it in Shariah Standard No. 9 and covers the hiring of persons in Standard No. 34. On cards it is used to describe the bank leasing you the payment system and its services in return for a membership fee, which is how DSN-MUI Fatwa No. 54 frames the Indonesian card's third contract. Because the rent is for the service, it should not move when your balance moves.
This is also a card contract structure
You are renting the use of the card and the payment system, and the rent is the fee.
How Ijarah works on a credit cardRelated terms
Sources
- AAOIFI Shariah Standard No. (9); Standard No. (34); DSN-MUI Fatwa No. 54/DSN-MUI/X/2006 clause Ketiga (c)