Q: Muslims use the hadith The Rasool (SAW) said that the rules of riba (interest)  do not apply between those at war with Muslims and actual Muslims. Since muslims and nonmuslims are at war muslims can interest be used? I heard this hadith in XXXX by Mufti XXX (country name and individuals name withheld.)
A: In western countries, Muslims try and use this hadith to exploit aspects of religion for their personal convenience. You are confusing this hadith for that situation in which NonMuslims are attacking Muslims and Muslims are trying to gain a balance in finances and are trying to strengthen themselves from foreign occupation. In such a condition they would be allowed to accept Riba. The country you have mentioned has been suffering from attacks for sometime. Therefore, the Mufti has that given opinion. Allah (SWT) knows best as to the intention and pain of this Mufti. However, you should read on if this applies to us in America.

Muslims are to be examples of good. They should work within the parameters of religion and the society they are part of. Muslims must do that which is best for their respective economies. What they do not only affects others, but Muslims as well. To think otherwise would be selfish. All communities and traditional religions agree, interest bearing transactions generally benefit the one receiving the interest. They function to exploit the weak and less represented. Humanity does more harm than good when indulging in such transactions.

Muslims that use this hadith in the manner that allows them to use interest are doing so based on their desires and not the religion. Muslims living in america and europe are not at war with anyone. Muslims are allowed to live and act freely in these countries. Many times, these mentioned countries are places of ‘safety’ for Muslims. Muslims that use this hadith are being misguided and some are accepting this misguidance to take part in transactions that are forbidden.
To do a wrong intentionally is forbidden. It is worse to do a wrong and justify it with misguided proofs.
Allah Certainly Knows Best.