Many people living in the Western countries are faced with the dilemma of interest, usery or Riba in their everyday life.
Islam and the Rasool (pbuh) have strictly admonished any dealings with riba.
The question arises how we explain riba. Is it simply interest or is it exploitive interest. At the time of the advent of Islam the jews in Arabia used to provide money and other items to the feuding arabs at astronomical interest rates, resulting in practically enslaving the individuals in a web that they could never get out of. Many were then kept as slaves or bonded labor to pay off the interest which they had accumalated.
The interest prevalent in West is not based on exploitation for the most part. They work with your budget and then based on what you can afford will offer you instalments for items like housing, cars, furniture etc.
Islamic scholars are divided on the issue. The Saudi Wahabis are of course deadly against anything that has the word interest associated to it. The other school of thought is more elastic and allows minimum interest or non-exploitive interest HALAL. Can anyone please shed some more light on it?
The author of the understanding-Islam site has, I think, a pretty clear explanation of why Riba means any and all “interest”, as opposed to merely exploitive interest:
http://www.understanding-islam.com/re/e-023.htm
He goes on to mention that prohibiting Riba does mean prohibiting profit (otherwise, Muslims could not invest, nor could they markup items for trading purposes), but rather he justifies the meaning of Riba as the collection of an increase of a principal amount with a fixed percentage over time.