The new Sharia-compliant MasterCard is less than meets the eye.

The UK's first sharia-compliant prepaid MasterCard has been launched in London – dubbed the "Islamic financial centre of Europe".

The Cordoba Gold MasterCard does not charge or receive interest as this is in direct conflict with sharia Law. The company also donates at least 10% of its profits to registered charities in the UK and abroad.

I’d always thought of MasterCard as a credit card, but the Cordoba Gold proves I was wrong.  Despite being branded MasterCard, the card involves no credit.  It’s “prepaid”, i.e., users have to deposit money into a Cordoba Gold account before they can use it to spend a dime.  The card can be used to pay for services at shops or to withdraw prepaid funds from a bank machine.  It’s just a glorified debit card.

The propaganda at the card’s website is hilarious.  From the FAQ page:

1.3 Do you give or receive interest?
No. Cordoba Gold does not and will not charge or receive interest as this is in direct conflict with Sharia Law.

Of course, the company charges the card user no interest for the blindingly obvious reason that no credit is extended.  The company’s risk of financial loss from customer default is precisely zero.  The customer cannot use the card before he or she makes a payment up front, and can never spend more than the amount previously deposited on account.

2.1 What makes the Cordoba Gold prepaid MasterCard different from a Credit Card?
When you apply for a Cordoba Gold cashplus prepaid MasterCard your credit rating is NOT taken into consideration because the Cordoba Gold card is not a Credit or Debit card. Even if you have a poor rating you will still be able to get a card.

Unlike a credit card where you buy now and pay later, Cordoba Gold is a prepaid MasterCard card, which means that similar to a Pay-As-You-Go phone you can only spend the money that you top-up on to the account. So, with Cordoba Gold you can only spend what you can afford.

All that bafflegab only obscures the short answer to the question: The primary difference between the Cordoba Gold and a credit card is that the glorified debit card entails no credit.  Hello!  Of course, your credit rating doesn’t matter because there’s no credit involved.

The company maintains it earns no interest on prepaid funds.  How then does Cordoba Gold turn a profit?  Check the fee schedule, found in the terms and conditions.

Card issue fee  £9.95
Monthly subscription fee (per account) £4.95
ATM withdrawal UK £2.00
ATM withdrawal non-UK £3.00
Cash withdrawal at bank £3.00

Additional cards can be provided for family, friends, business associates, etc., for only £9.95 per card.  If you cancel your card and want the unspent balance refunded, you will be charged £10.00.

With that laundry list of fees and charges, the Cordoba Gold will be gold, all right: A gold mine for the company that markets this little scam.

h/t: Dhimmi Watch