A Canadian firm, UM Financial Inc., has begun offering a prepaid card aimed at Muslims who wish to have the convenience of a credit card but refrain from paying any interest. Islamic religious law forbids the paying or earning of interest.
"Credit card debt can be lethal for the financial stability of ordinary individuals and families," said Omar Kalair, CEO of UM Financial Group. "Canadians will now be able to adopt the responsible, interest-free lifestyle UM Financial promotes, by living within their means and not ever having to worry about high credit card interest rates while enjoying the convenience and security offered by MasterCard. With credit markets tightening, the majority of new credit card applications are denied."
Faithful Muslims can use traditional credit cards without violating Islamic law but need to make sure they pay off their balances in a timely manner to avoid any interest charges. Kalair said he came up with the prepaid card after it became clear that many Muslims inadvertently wind up paying interest charges on traditional cards.