A majority (63%) of Millennials have said “No” to credit cards, according to a survey commissioned by Bankrate and compiled by Princeton Survey Research Associates International. It included responses from 1,161 adults living in the continental United States. While refusing to obtain a credit card may seem like a financially responsible thing to do, there is one major downside: Having and responsibly using a credit card is one of the fastest ways of obtaining and keeping a good credit (FICO) score. That said, 18-to-29-year-olds are steering clear of plastic, and they have their reasons for doing so. (For more, see Credit Score Ranges: What Do They Mean?)

Reasons Millennials Don't Have Cards

Many Millennials simply don’t want credit cards and don’t feel they need them. Instead, they have turned to debit cards, which force them to be financially responsible, as they can only spend what’s in their bank accounts. Others have heeded warnings from their parents, many of whom had credit card and other financial troubles, especially during and following the Great Recession. Having lived through this trauma, for many the warnings have taken hold. In addition, many Millennials are opposed to credit cards and the potential for additional debt because they already have plenty of debt – thanks to thousands of dollars in outstanding student loans left over from that college education they received recently.

Credit History Woes

Not having a credit card – and the subsequent lack of a credit history – creates additional problems. These include the inability to qualify for many types of insurance or sign up for a cell phone plan without a large security deposit; it can even work against getting a job. These downsides don’t even take into account buying a home or securing an automobile loan, both of which depend greatly on your established credit history. Not having one makes it much more difficult for a potential lender to know whether you will be a responsible borrower.

Advantages of Having a Credit Card

Having a credit card and using it responsibly can make life easier. A credit card account can be a ready source of emergency cash, at least until you build up an actual savings reserve. Using a credit card for purchases automatically provides you with fraud protection. Although the same can be said for a debit card, the protection is generally quicker with a credit card and the thieves haven't gotten actual cash from your bank account. Credit cards also come with extended warranties and in some cases travel insurance. It’s almost like having access to a huge multinational law firm (hired by the bank that issues the card) on your side in a dispute.

Rewards Save Money

If you choose wisely, your credit card may also come with a cash back rewards program that gives you up to 3% back on purchases made with your card. If you put $1,000 per month on your credit card (and pay it off to avoid interest charges), your “reward” will be an extra $300 at the end of the year. In essence, it’s like getting a 3% discount on every qualifying purchase you make. If you buy a set of headphones for $100, the actual cost to you is $97. If you are disciplined and pay off your charges each month, it’s free money – no charge to you – plus you get all the other benefits as well.

The Bottom Line

If you’re a Millennial who has so far avoided getting a credit card, consider signing up for one soon. Use a credit card screener, such as this one at Creditcards.com, to find the best card for you. (For more, see 4 Tips for Picking the Best Credit Cards.) Sign up for one card only. Managing your debt and credit card balance will be easier, as will checking for fraudulent use and keeping track of your spending habits. Besides, there’s no real advantage to having many cards when it comes to establishing a credit history – and the disadvantages are obvious. Finally, use your credit card for expenditures that you can easily pay off on a monthly basis (to avoid interest charges). You will be tempted to use it for big-ticket items, but that’s how people often wind up in debt.