Islamic credit cards in Indonesia

The market

Only three issuers currently offer Islamic credit cards in Indonesia: Bank Syariah Indonesia (3 cards), CIMB Niaga Syariah (5 cards) and Bank Mega Syariah (2 cards) — ten cards in total. The market has SHRUNK rather than grown. Bank Danamon's Dirham Card, launched July 2007 as Indonesia's first Islamic credit card under the fatwa and BI Circular Letter No. 9/183/DPbS/2007, had been withdrawn by 2010. Most of Indonesia's Islamic banks — Bank Muamalat, BTPN Syariah, Bank Aladin Syariah, BCA Syariah, Panin Dubai Syariah, and the regional BPD syariah units — issue no credit card at all; Bank Muamalat's well-known Shar-E brand is now a DEBIT card range, not credit. The economics are strikingly consistent across issuers: the recurring monthly charge is set as a fixed Rupiah amount tied to the CARD LIMIT rather than to the outstanding balance, at 1.75% of limit for BSI and Bank Mega Syariah and 2.625% for CIMB Niaga Syariah, and it is then netted down by a 'cash rebate' or 'rebate' on payment. Where the three differ sharply is penalties: BSI charges NO late fee and NO over-limit fee at all, while Bank Mega Syariah charges ta'widh from Rp50,000 and an over-limit fee of Rp250,000, and CIMB Niaga Syariah charges ta'widh of Rp75,000 or Rp100,000.

Who decides what is compliant

Indonesia has the most rigorously specified Islamic credit-card framework of any market. Product-level Shariah rulings are issued by the Dewan Syariah Nasional - Majelis Ulama Indonesia (DSN-MUI), the national Shariah board of the Indonesian Ulema Council, and every Islamic bank also has its own Dewan Pengawas Syariah (DPS) at institution level. The governing ruling for cards is Fatwa DSN-MUI No. 54/DSN-MUI/X/2006 on Syariah Card, issued 18 Ramadhan 1427 H / 11 October 2006. Every Indonesian Islamic card in this dataset cites that fatwa by number on the bank's own pages.

Rules that limit you

• Fatwa DSN-MUI No. 54/DSN-MUI/X/2006 permits a Syariah Card built on THREE simultaneous contracts: KAFALAH (the issuer is guarantor, kafil, to the merchant for the cardholder's payment obligations, and may take an ujrah kafalah for the guarantee); QARDH (the issuer is lender, muqridh, to the cardholder on cash withdrawals from the issuer's own bank or ATM); and IJARAH (the issuer is a payment-system service provider, for which the cardholder pays a membership fee)
• The fatwa sets five explicit LIMITS (Dhawabith wa Hudud): the card must not give rise to riba; must not be used for transactions that are not Shariah-compliant; must not encourage extravagance (israf), by among other means setting a maximum spending ceiling; the primary cardholder must have the financial capacity to settle on time; and the card must not offer facilities that conflict with Shariah
• The fatwa permits exactly FOUR fees: membership fee (rusum al-'udhwiyah), merchant fee, cash-withdrawal fee (rusum sahb al-nuqud), and a kafalah fee. Every one of them must be fixed clearly at the time the card application contract is made, EXCEPT the merchant fee
• CRITICAL: the cash-withdrawal fee must be set at an amount NOT LINKED TO THE SUM WITHDRAWN ('yang besarnya tidak dikaitkan dengan jumlah penarikan'). This is why Indonesian Islamic cards charge a flat Rupiah cash-advance fee (Rp25,000 at BSI, Rp50,000 at Bank Mega Syariah, Rp100,000-175,000 at CIMB Niaga Syariah) rather than a percentage — a percentage would make the charge a return on the qardh loan, which is riba
• The fatwa separates TA'WIDH from DENDA. Ta'widh is compensation for costs the issuer actually incurs because of the cardholder's late payment, and the issuer may keep it. Denda keterlambatan (a late charge) may also be imposed, but it 'akan diakui seluruhnya sebagai dana sosial' — must be recognised ENTIRELY as social/charity funds, not as bank income. This is the mechanism that lets an Islamic card have a late charge at all