It's understandable why, as The New York Times recently reported, millennials are staying on the sidelines when it comes to getting credit cards. They're buried under their own student debt and have fresh memories of how people got burned by debt during the Great Recession. As a result, millennials tend to use debit cards and other forms of payment, including cash, for their spending needs. 

But there are compelling reasons to at least have one credit card and to use it, if only sparingly. For one thing, credit cards have unique features that debit cards and other payment types don't. Your credit card may provide free extended warranty protection on items you buy with it. There are credit cards that offer built-in travel insurance, rewards points or cash back. And if you report a fraudulent credit-card purchase in a timely way, you're responsible for a maximum $50 of the charge; with a debit card, your money may be irretrievable. (Consumers Union, the advocacy and mobilization arm of Consumer Reports, has pushed for more protections for mobile and debit payments.) 

And because using a credit card regularly and making timely payments helps you develop a good credit history, it's one of the smartest things you can do for your financial future. That credit history is often used by employers to determine whether to offer you a job; by landlords to judge your fitness to rent; by lenders to decide which car loan or mortgage interest rate to charge you; and even by insurers to price your car insurance premium.  (Consumers Union is also pushing auto insurers to abandon that practice.)

Credit Card Use Uniquely Affects Credit Score

Your credit history is reflected in your credit score, a three-digit number that typically runs from a low of 300 to a high of 850. Thirty-five percent of your FICO score—the credit score used most by lenders—is based on how well you pay on time, says Fair Isaac Corp., FICO's creator. If you have college debt and are making monthly payments on time, you're on the right track.

But another major factor, accounting for about 30 percent of your score, relates to revolving credit, the type of lending offered by credit cards. As FICO sees it, the more credit that is available to you each month—and the less of it you use—the better. That ratio of debt to available credit is called "credit utilization." 

Having at least one card and using it properly—if only occasionally—can help you demonstrate low credit utilization. According to Can Arkali, FICO principal scientist, consumers with the highest FICO scores—800 or higher—use just 7 percent of their available credit each month, on average. If, say, your credit card has a $5,000 spending limit, you'd have to carry an average month-to-month balance of less than $350 to qualify for that very high score. (Ideally, you pay off that balance every month.) 

The FICO score also favors folks who show they can responsibly manage a variety of debt types—auto loans, college debt, a mortgage, a home-equity line of credit, and credit cards. A long history with one credit card also helps pull up your score.

Use a Credit Card Responsibly

Even if you're persuaded that having a credit card is a good thing, you might worry that it will make it too easy to overspend. Unfortunately, the obvious solution—to get a card just to raise your score and then shove it under the mattress—won't work. Only active credit accounts are considered in your score, FICO says. That means you have to use your credit card periodically—say, a couple of times a year. You can also take these steps to develop some comfort with owning and using your card:

• Stick to a budget. Have a written plan that helps you decide how you will spend your money each month. Only get a credit card after you've successfully managed your money for a couple of years, says Lauren Saunders, associate director of the National Consumer Law Center in Boston, a not-for-profit advocacy group.

• Borrow only when you can repay. "Remind yourself, over and over again, that your card credit limit is not money given to you that you did not have before," says Eleanor Blayney, consumer advocate for the Washington, D.C.-based CFP Board, which certifies financial planners. "What should determine your spending is the money you have available in the bank after all other necessities are paid for."

• Use your credit card infrequently. Use it once every six months or so, then pay off the balance right away, advises Bruce McClary, a spokesperson for the not-for-profit National Foundation for Credit Counseling in Washington, D.C. Set up multiple payment reminders on your smartphone if you need to. 

• Don't keep your credit card information on file with online vendors. "It’s too easy to point and click and overspend if your numbers are already on file," Blayney notes. "Make it so you have to enter the numbers each time you buy, as a way to also buy some thinking time."