Five Questions You Shouldn't Be Afraid to Ask Your Credit Card Company

Like it or not we live in a credit-driven world. You want to buy a car? You've got to have credit. You want to buy a home? You need good - make that great - credit. And what happens if, heaven forbid, you have a family emergency? You're nowhere if you don't have a line of credit or a credit card.

The problem is that in order to get credit you need to have credit, but knowing where to start can be tough. This naturally leads to our first question, how can I establish credit for myself?

If you are new to the world of credit or if you need to rebuild your credit due to previous financial issues, talk to your bank or credit card company about getting a secured credit card. A secured credit card requires you to make a deposit (usually $250) against which you can make purchases. The deposit acts as your credit limit and as you make payments, your credit card company will report the status to the credit bureaus. You can expect to pay a higher rate of interest at least until you improve your credit history.

Speaking of interest rates, a very important question that many people fail to ask their credit card company is how can I improve my interest rate?

Your interest rate is based on your credit worthiness. If you miss making your monthly payment on this or any other line of credit, you may find your interest rate going up. It's called a universal fault provision. You should double check the terms of your card by contacting your credit card company. You can also avoid problems by paying everything on time. However, you might also try asking your credit card company: what's the best interest rate you can give me?

"My husband and I each have our own credit card, with the same bank. Just one: for emergencies," says business woman Trish. "But I was astounded to find out that his APR (annual percentage rate) was two percent lower than mine. So I called and asked to get the lower rate. They told me they couldn't. I told them I thought they were being sexist, and I was going to move my business elsewhere. And I did."

In fact, Trish got an offer in the mail for a card with a promotional zero APR for transferring balances from another card. So she moved her entire balance from her first card and then monitored her monthly statement in order to make note of when the promo rate changed to a standard interest rate, a very important detail.

If you look at your monthly statement, you will note there are different balance categories - purchase, cash, and balance transfer or promo -- each with their own associated APR. If you see that your promo is now a higher rate than your new purchases, you'll want to ask your card company, can I choose how my payment is credited?

Most companies will allow you to submit your payment with specific instructions of how you want the monies credited. This means that if you owe more on your promo balance and it is at a higher APR, you can request that this balance be paid off before the other lower APR balances.

Last but not least, if you inadvertently submit your payment late and find a late fee on your next bill, don't be afraid to call and ask how about giving me a credit on that late fee? As long as you have established good credit by making regular payments and this genuinely was an oversight, many times credit card companies are willing to work with you to retain your business.