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hannah114  
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Rating: 0 of 0 votes Quote hannah114 Replybullet Topic: Islam and Riba (interest, usury)
    Posted: 07 July 2008 at 12:50am
How have muslims here dealt with the matter of 'Riba' (interest, usery) in their daily lives?
 
For those who are reverts, if you previously owned credit cards in which you did not pay in full each month, taken loans, mortgages etc. that involved interest before you were muslim, how have you coped with clearing interest from your finances?
 
what advice do you have for others?
 
if you have any useful links for interest-free financial institutions I'm sure someone here might find them helpful Insha'allah
 
 
 


Edited by hannah114 - 07 July 2008 at 1:23am
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Al-Cordoby  
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Rating: 0 of 0 votes Quote Al-Cordoby Replybullet Posted: 07 July 2008 at 1:01am
When there is no Islamic bank available, one of the decisions to be made is what to do with savings?
 
One alternative is to leave them in a current account till a suitable investment opportunity is found, which is a safe alternative in order not to deal with Riba/interest
 
Not an easy decison, but better than getting into suspicious transactions
 
As for credit cards, the best way is to use them when needed but pay off all amounts on-time
 
 
 
 
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Al-Cordoby  
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Rating: 0 of 0 votes Quote Al-Cordoby Replybullet Posted: 09 July 2008 at 12:20am
One piece of advice on credit cards:
 
When you have the option of choosing betwen a credit card and a debit card, always choose a debit card
 
That way you'all always only spend what you can afford, and not go beyond your budget
 
 
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keithnurse  
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Rating: 0 of 0 votes Quote keithnurse Replybullet Posted: 10 July 2008 at 12:20am
How do interest free financial institutions make money?  In Islamic countries are  banks owned by the government so they don't need to make a profit?  It seems to me their is a difference between usury and interest.  usury being excessive interest.  What would be wrong with a 2-3% interest student loan for example if you can't afford to pay the tuition at the time and you make too much to get most grants?
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Al-Cordoby  
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Rating: 0 of 0 votes Quote Al-Cordoby Replybullet Posted: 10 July 2008 at 12:44am
Sound financial institutions make money by taking a business risk and producing real value-added to the economy, not by lending money
 
As can be seen from the current banking crisis in the West, lending money is unsustainable on the long term, as money itself is not a commodity which has value, like for example gold or silver. It is a store of value and a means to facilitate transactions. Once the bubble bursts, the whole interest-based lending system falls due to the domino effect
 
That's one of the reasons why in Islam interest / usury are prohibited
 
 
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keithnurse  
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Rating: 0 of 0 votes Quote keithnurse Replybullet Posted: 10 July 2008 at 2:06am
Originally posted by Al-Cordoby

Sound financial institutions make money by taking a business risk and producing real value-added to the economy, not by lending money
 
As can be seen from the current banking crisis in the West, lending money is unsustainable on the long term, as money itself is not a commodity which has value, like for example gold or silver. It is a store of value and a means to facilitate transactions. Once the bubble bursts, the whole interest-based lending system falls due to the domino effect
 
That's one of the reasons why in Islam interest / usury are prohibited
 
 
 
 
Can you name an example of a financial institution taking a business risk and producing value.  I don't know what that statement means.
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whirlingEcstasy  
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Rating: 0 of 0 votes Quote whirlingEcstasy Replybullet Posted: 10 July 2008 at 5:11am
Originally posted by keithnurse

  
 
Can you name an example of a financial institution taking a business risk and producing value.  I don't know what that statement means.
 
I think it comes under Venture Capital.
Slave of ibn Arabi, Muqallid of Shaykh Sayed Abdul Qadir Al Gailany alaihira7ma wa ridhwan
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jamilahz  
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Rating: 0 of 0 votes Quote jamilahz Replybullet Posted: 10 July 2008 at 8:58am
I've actually read with Credit cards that signing the agreement to pay interest if accrued is not acceptable.  
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rahma  
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Rating: 0 of 0 votes Quote rahma Replybullet Posted: 10 July 2008 at 10:07am

*Since most savings accounts give interest (a pitiful 1%, but it's still interest), one can have 2 checking accounts instead of a checking and a savings account.  Only hook up one account to your debit card, and treat the other live a savings account.

*The husband and I both have credit cards, so that we can build up our credit score to inshaAllah qualify for one of the halal home loans at some point in the future.  However, we make sure we pay the balance off each month, so that we do not pay interest.
 
 
 
On the halal mortgage/loans - During college, I was very good about not getting a credit card.  I saw too many friends drowning in debt and starting their working lives off 5 steps back.  My senior year, I spoke with a representative of an islamic mortgage business about getting a loan in a few years.  The first thing the rep asked me about was my credit score.  Umm, yeah, I don't have one.  He advised me to get a credit card to build one up   Yeah, so not happy. 
 
 
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jamilahz  
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Rating: 0 of 0 votes Quote jamilahz Replybullet Posted: 10 July 2008 at 10:19am
Ok, I actually looked for a couple of rulings on having a real credit card.

Islamonline.com - this is not islamonline.net - different site all together

IslamQA.com


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hamayoun  
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Rating: 0 of 0 votes Quote hamayoun Replybullet Posted: 10 July 2008 at 10:27am
Bear in mind that there is definitely another scholarly opinion that credit cards are halal as long as you pay off the full amount each month.  This is the opinion of the Islamic 'expert' on riba, Mufti Taqi Usmani.
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jamilahz  
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Rating: 0 of 0 votes Quote jamilahz Replybullet Posted: 10 July 2008 at 10:41am
Hamayoun,

Is there a link for his ruling?
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hamayoun  
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Rating: 0 of 0 votes Quote hamayoun Replybullet Posted: 10 July 2008 at 10:46am
May Allah give me patience, Ameen.

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jamilahz  
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Rating: 0 of 0 votes Quote jamilahz Replybullet Posted: 10 July 2008 at 11:08am
Thanks

Interesting perspective.
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