An Islamic credit card based on ujrah earns income from a fee charged for actual services, such as issuing the card, running the account, processing payments and providing customer support, rather than from a percentage charged on the amount you owe. Ujrah is the Arabic word for a wage or fee for work done under a lease of services (ijarat al-ashkhas).
The model is among the most common in the market, usually combined with qard hasan, the interest-free loan under which the bank pays merchants for you. The Sharia reasoning is that a loan may not earn anything, but services may be priced. The tension lies in making sure the fee reflects genuine services and does not simply imitate interest.
What ujrah means in a card contract
Under classical rules, a fee is valid when the service is known, lawful, and the price is agreed. For a card, the services can be listed: account opening, card production, statements, authorisation of transactions, fraud monitoring and access to the network. The customer pays for these, whatever the amount spent.
Why the fee must be separate from the credit
If the bank advances money under qard, scholars insist that any extra payment linked to the loan amount or duration be avoided. The fee is therefore designed to be independent of the outstanding balance. The services exist whether you use a lot or little of the limit.
Fixed fee versus tiered fee
Many issuers use a flat annual or monthly fee. Others set tiers according to the card category, such as classic, gold or platinum, because each level offers a different bundle of services. A fee tied to category is generally easier to defend than one rising with the limit used.
A quick test
Ask whether the fee would change if your balance doubled. If yes, the structure leans toward a price on money, and the Sharia desk should explain why it is still acceptable.
Example: a gold card and a family budget
The following numbers are illustrative only and do not represent any bank. A gold card has a credit limit of 10,000 units and an annual service fee of 240, charged monthly at 20. Compare two households with different usage.
| Household | Monthly spend | Balance unpaid | Ujrah paid | Fee varies with balance? |
|---|---|---|---|---|
| A, light user | 1,000 | 0 | 20 | No |
| B, heavy user | 6,000 | 0 | 20 | No |
| C, carries a balance | 3,000 | 1,500 | 20 | No, but see the late rules |
The point of the example is that the three households pay the same fee, since the service is identical. The difference appears in how a carried balance is treated. If household C pays an extra amount that grows with the 1,500, the product starts to look like a conventional loan.
How a ujrah card works in practice
The steps below describe a typical qard-plus-ujrah sequence. Variations exist, so confirm in your agreement what the bank calls each element and which Sharia board approved it.
- You apply and the bank assesses income, commitments and eligibility.
- You sign a framework agreement listing the services and their price.
- You are given a limit and a card, and the first fee is charged as scheduled.
- When you spend, the bank pays the merchant as an interest-free advance.
- The statement shows the advance and the fee as separate lines.
- You repay the advance, without addition, by the due date.
Sharia views on fee-based models
Many Sharia boards accept a service fee model when the services are real, the fee is known and independent of the advance. AAOIFI standards on cards and on lease of services are often cited in this area, in general terms. Nonetheless, some scholars worry that a fee scaled to the credit line is disguised interest.
The cost-based debate
A point of difference is whether the fee may exceed the issuer's real cost. Some scholars say an actual cost is permitted but profit on a loan is not. Others say the fee is for services distinct from the loan and can include a reasonable margin. Both positions are respected, so check which one the board follows.
Discount from merchants
Banks also receive merchant fees from the network for each transaction. Many scholars accept this income as a commission for payment services, because it comes from the merchant and not from the borrower.
Transparency as a safeguard
Whatever the legal analysis, a bank that publishes its fee schedule and explains each line is easier to hold to account.
What to verify before choosing a ujrah card
Request the fee schedule, the product summary and the Sharia approval note. Look for the connection between the fee and the services. Check the late-payment treatment, since this is where fee-based cards often differ most from each other.
- A named list of services covered by the fee.
- No fee formula tied to the unpaid balance.
- A clear treatment of late amounts, ideally capped and donated.
- No hidden annual percentage on the credit line.
- A named Sharia supervisory board.
Frequent mistakes and refusals
A common mistake is to assume that the word fee guarantees compliance. A charge can be called a fee and still behave like interest if it grows with the balance or time. Another mistake is overlooking small fees such as cash advance or foreign currency charges.
Refusal reasons
Applications can be declined for reasons unrelated to religion: insufficient income, a poor payment history, missing documents or residency issues. The bank may also offer a lower category. Never assume approval, and do not pay anyone to guarantee it.
Avoiding costly surprises
Read how fees are charged when a card is idle or cancelled, and keep a record of the date you ask to close it, to avoid an extra charge.
Halal alternatives to a ujrah card
If the fee model raises doubts for you, consider a charge card with full settlement, where the only cost is a fixed membership fee. A prepaid card avoids credit altogether. A murabaha financing for a specific item is another route when you need time to pay.
You may also decide that for you a debit card on an Islamic current account is sufficient. Compare all options on yearly total cost in currency, and keep the Sharia statements of each product for your records.
Questions about ujrah cards
Is ujrah the same as interest? Not in structure. Ujrah is paid for services and set independently of the loan, while interest is a price for time and amount. Whether a specific card respects this depends on its terms.
Why does the fee not depend on how much I spend? Because it pays for services that are available in the same way whatever your spending. If it scales with the balance, ask the issuer to justify it.
Can the bank change the fee during the year? Only according to the terms you signed, usually with advance notice. Look for the clause on changes and your right to close the account.
Is a ujrah card suitable for someone who carries a balance? It is better suited to those who settle in full. If you often carry a balance, check the late rules and consider a card with a clearly structured plan.
Who confirms that the card is compliant? The issuer's Sharia supervisory board approves the product. For personal doubts, speak to a qualified scholar.