There is no financial institution on earth who wants to be the one left with so much credit debt on their books that it makes shareholders in their financial institutions withdraw their backing by selling their shareholding.

Banks and other financial institutions have to satisfy their shareholders and if the shareholders are not receiving adequate dividends then they are more likely to withdraw or sell their shares and buy into another bank or into a higher dividend paying investment.

Bank Image

When there are so many self-funded retirees now depending on their investments and the dividends they provide to either fully fund their retirement or to ‘top up’ a pension;  any decrease in their income means a lower lifestyle choice. Many of these self-funded retirees have had their retirement dreams squashed due to the Global Financial Crises (GFC) in 2008.

So for any individual or small business looking for new credit in 2012, you will have to have either an exceptional credit record or an exceptional credit rating. And if you just have the highest credit rating then you will still need the assets to cover that debt with a lot left over!

When countries with a good track record of repayment have to pay a higher rate of interest on their borrowings then it should start to ring alarm bells for you. Something in the global financial world isn’t working so the best advice I could give you is to remove yourself rather than seek new credit.

If you are after a new credit line to extend or renovate your house or to fund a business expansion, then putting this off until 2013 could be very advisable.  Paying down existing debt and lessening your exposure to the banking industry fluctuations or fallout could make you much more financially comfortable rather than seeking new credit at this time.

How does credit card debt settlement work?

Credit card debt settlement can be brought about by any credit card debt settlement company. When you approach such a company for debt related help, you are asked to sign up for a debt settlement program. You are then provided with a negotiator who would deal with all your creditors on behalf of you. The negotiator would then evaluate your financial situation thoroughly and negotiate with your creditors to decrease your outstanding debt amount by 40% to 60% so that you can pay back some debt amounts. Once your creditors agree to settle for the amount offered, you have to pay the negotiator the whole amount in lump sum who then distributes the amount amongst your various creditors. thus, you can not only successfully manage to get out of your debts you are able to get off your shoulder the whole process for it which is taken care of by the settlement company.

Is credit card debt settlement a good option?

Credit card debt settlement is one of the options to get out of your debt; it doesn’t mean it is the best option. In fact, there are a number of drawbacks when it comes to credit card debt settlement. You have your credit score reduced as you are not paying back your debts in full and you have to pay the entire debt amount in a lump sum which can be inconvenient. However, the fact that credit card debt settlement can help you prevent bankruptcy, which can be disastrous to your financial future makes it a lucrative enough option.

Australia is running on a two speed economy. Any business associated with the Mining industry is doing well while manufacturing and small businesses are getting desperate. Retailers are hoping for good Christmas sales but already the “Sale” signs are appearing in shop windows in many shopping centres and shops where before they normally wait for the biggest sale period of the year that commences on Boxing Day.

Small Business Retailers

Retail shops located in Shopping centres and main street shopping areas, have relied on post-Christmas Sales to increase their profitably  and to keep a stagnant cash flow going during the rest of the year when quieter periods of trade affect many retailers.

Consumers are wary this year and even with a lowering of the interest rate by the Reserve Bank of Australia, consumers are now very leery of what the four big Australian Banks may do early next year as the Euro Debt crises kicks in further.

Many of these small retail boutique-style shops have high overheads and shelves full of non-consignment stock.  If the shop owner has not taken the goods on a consignment basis and is able to return what hasn’t been sold, then they are more likely to suffer worse than a shop owner who only sells stock on consignment and can return what hasn’t sold.

These non-consignment retailers are the small businesses most likely to suffer the effect of the Euro debt Crises first as their borrowings from the bank are high and if the expected and hoped for Christmas Sales figures are below what is needed, they may have to borrow more and this will be done at world market rate for inter-bank lending rates.

The Banks Have signalled their intentions Based on Bank Exchange Rates in 2012

For the first time in many months, the four big Australian banks did not immediately change their interest rates shortly after the Reserve Bank of Australia announced the cut in interest rate percentage points. Many smaller credit societies and smaller financial institutions announced their lowered interest rates within hours but the big four banks played a ‘game’ of Mexican stand-off to see which one of them would move first on interest rates and take the good or bad publicity, for their decision.

Once the first Bank announced they would be passing on the full interest rate cut to their customers, then within 24 hours the other three announced their intention to do likewise.

Yet these Australian banks deny that there is any collusion? These actions tell the Australian public differently. When one bank can announce profits of $1.65 BILLION in a 12 week period, we obviously have a different problem in our banking industry to the Euro Debt crises.

Those problems aside, Westpac, one of the big four banks in Australia, announced yesterday that in future, they reserve the right to move on interest rates at any point in time due to the fact that the cost of borrowing money internationally has been raised considerably as more countries and banks around the world compete for available funds. It now seems to be that any available funds will be going to the highest bidder.

If any bank wishes to stay in Business, then they will need to be able to pay as the highest bid.

And the banks need shareholders to buy their stock so they will be looking to be the one that will pay their shareholders the biggest dividend and return on their investment.

When any Bank makes announcements that say they can and will base their interest rate costs on something as volatile as the current international bank exchange rates, it’s time to understand the impact of the Euro debt crises on all credit users around the world.