Vattené wrote:Discover would be my first choice (I have been very pleased with Discover, so I may be biased here). Start earning rewards right away! IMO acceptance really shouldn't be an issue. International acceptance is a different story, so if you plan on using this card abroad a lot that might change things, but in the US I really don't think it will be a problem unless you know there are a lot of smaller mom&pop type places you purchase from that already don't take Discover. I used Discover as my sole credit card for a while and I could probably count on one hand the number of places I couldn't use it, in which case it wasn't really a big deal to use my debit card. It comes down to personal preference, but practically speaking having a Discover as your only credit card won't be too limiting.
I've never had a Capital One and I don't think it would be a bad choice, but I would rather go for something that would be more useful to me now. Discover is also good about growing with you. Anecdotes aside, Discover's customer service is clearly rated higher than Capital One's, if that's important to you.
I'd avoid Wells Fargo primarily because of the Annual Fee. With responsible use, your credit will soon place you in a position of having your pick of any prime card you want, and you won't want to be saddled with an account you have to pay for and that doesn't do anything for you. You can get better products now, so I don't see any value in settling for something worse just in the hopes that a banking relationship will do something for you later on.
Regarding utilization, for scoring purposes having a high utilization means you are using a lot of the credit that's been extended to you, which translates to risk for lenders. Even if you are paying in full it still looks like you are nearly maxed out, just because it is the mathematical result of the formula that determines your credit scores. This is why people recommend 30% utilization (and as mentioned 10% is even better, so long as it's not 0 lower is better). You don't need to, but if you want to you can manipulate the utilization that's reported on you by making a payment before the outstanding balance gets reported to the CRAs. The statement date is usually, though not necessarily, when balances are reported. So if you start out with a $500 secured card and have made $450 in purchases coming up on the close of your billing cycle, rather than let that $450 report (showing 90% utilization), you could make a payment of $400 and let $50 report (showing 10% utilization).
Making a small purchase once a month will build your credit just as fast. You'll still have payment history building up and account aging. There's no downside of doing this credit-wise, but many (around here, at least) like to use credit for nearly everything for rewards and for fraud protection reasons.
I wholeheartedly agree on every point.
Discover would by far be my pick of the three. I've had my Discover card for 6 or 7 years now and I'm barely counting on two hands the number of places that didn't take it. I guess it does depend on your location and the types of places you do business, but I really haven't seen an acceptance issue. Also, definitely of the three they have the best rewards and best customer service, and IMO are most likely to grow with you.
Wells Fargo would also be my last choice of the three. As stated, you can get a better card now that will have more use and won't cost you money down the road.
Capital One...well I personally don't like them and did not find their customer service or products very satisfactory, but that's my own bias. I'd still go with their secured card over Wells Fargo though.
Regarding utilization the main thing to focus on is how much reports. When you get the card make sure you find out the reporting date. For utilization purposes it won't matter whether you carry a balance of $500 all month and pay it down to $50 right before it reports so that only the $50 reports, versus only using $50 the entire month and letting that report.
In general make sure to pay in full every month to avoid interest charges and always pay on time.