Islamic Credit Card Case Study

CHAPTER 1

INTRODUCTION

1.0 Introduction

This study investigates on the factors to choose Islamic Credit Card among people in Shah Alam. This chapter will describe on the overview of the study. The section 1.1 will explain on the background of the study. While section 1.2 will identifies the problem statement towards the study. Then, section 1.3 will list all the research questions. It follows by the section 1.4 which is about the research objectives. After that, section 1.5 is about the limitation of the study and section 1.6 is ascertains the significance of the study. Section 1.7 will describe on the definition of term and lastly, section 1.8 explains about the chapter summary of this chapter.

1.1 Backround of study

This study is about the

Islamic Credit Cards is a plastic money which involves the buy first and pay later option but it is strictly conducted on the basis of Shariah values, principles and objectives (Hanudin, 2012). An Islamic Credit Card is different with conventional credit card where it have no compounding interest, not allowed to make payment on non-Halal transaction (such as buying liquors, gambling and uses in entertainment club), and also do not charge interest rate but used profit rates to generate fee-based income. These kind of activities are practicing in conventional credit card (Shafinar et al., 2013). In order to market Islamic credit card effectively, the marketer of financial institution need to differentiate the concept of Islamic credit card and conventional credit card. The marketers also can offer the Islamic credit card by differentiating the importance of credit card’s characteristics (Hanudin,

Attitudes also the degree of favorableness and unfavorableness of an individuals feeling towards a psychological object according to Ajzen and Fishbein (as cited by Fauziah, Ramayah & Dzuljastri, 2008). Daryl Bem said that "Attitudes are likes and dislikes" as cited by Schwarz & Bohner (2001).

2.1.6 Selection on Islamic Credit Card

Massey on Ferdian et al. (2008), defined Islamic credit card as a payment that meet with at least three criteria of Islamic principle. First, card must meet the shariah requirement on lending. It must ditch the three essential prohibitions in the Islamic finance which are riba, gharar and maysir. Secondly, an Islamic credit card must have certainty to be accepted worldwide it should use payment scheme like visa or master card. Thirdly, an Islamic credit card should not animate behavior that considers haraam. In addition, Hanudin (2012) defined the Islamic credit card as “plastic money” which involves the “buy first and pay later” option, however but it is strictly conducted on the basis of Shariah values, principles and