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Credit Cards in Sri Lanka Top News about Credit Cards!
2008-04-21 04:57:22

Credit Card Dream - No Interest Rates, No Penalties!

If you were asked to describe the credit card of your dreams, how would you do that? Most probably, every cardholder would love to see low or no interest rates, more rewards, and no late fees on his/her credit card. For credit users in Sri Lanka, it's no dream, it's real. The ABC Barakah credit card issued by ABC Investment Limited comes with no interests or penalties for being late. On the one hand, this plastic is the one you can only dream about. On the other, it's not clear how banks benefit from cardholders. Is there any catch here?

Nope, it's no catch. It's a credit card that goes hand by hand with religious teachings. Take for example credit interest rates or late charges, they are forbidden under Islamic laws. That's why this plastic goes with no interests.

The question is, how banks benefit from their clients? The point is, the banking system in Sri Lanka is based on profit sharing. This way, if you are a depositor, your money will be invested by the bank in profit generating investments. So, if the bank gains profit, a depositor will also get his share in accordance with a predefined ratio. By all means, it's rather risky, but this system works.

First and foremost, this card should be used for Halal purchases only, i.e. permissible under Islamic laws. You can hardly buy cigarettes or alcoholic drinks with this plastic. Moreover, one cannot use it in casinos and nightclubs. We must acknowledge the fact that the cases of credit card misuse typically result in heavy charges.

While US creditors stimulate our buying by offering a bunch of credit perks, lenders in Sri Lanka keep an eye of consumer credit card spending. In Sri Lanka, if you happen to misuse the card, it will be immediately withdrawn, as this card is created in accordance with Islamic rules. Creditors will screen credit activity of cardholders, and if they see that a cardholder has made a forbidden purchase, he will be warned. If this goes unheeded, creditors will have to cancel the credit card.

Interestingly, but the issuers of this card will clear up all the dos and don'ts of credit card usage before a cardholder signs up for a credit card agreement. Isn't it a good chance to educate potential clients about smart credit use?

It must be said that initially ABC Barakah will be offered to established customers of ABC, or to those who have close relationship with it. The card will be secured with a deposit. The minimum credit card payment is supposed to be 25% of the loan. It will come in various categories, including Gold, Platinum, Elite, and more. The credit limit on a Gold credit card will be about 50,000 rupees, and as for Elite card, it will be up to half a million rupees.

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