I'm the contrarian on the site. I believe that credit cards are the spawn of the devil and should be avoided at all costs. I have lived with and without them, and can confidently say life is much more relaxed without them. Instead of getting a credit card, build up your cash reserves.
If you want to get rich, do rich people stuff. Rich people don't borrow money. If they hit a rough patch they eat beans and rice, or serve hotdogs at their kids wedding reception. ** Edit ** Even Guy Kawasaki (guru of building wealth on other people's money [aka debt]) only recommends buying stuff that will provide cash flow on debt, never consumer goods or depreciating assets.
Take the old fashioned route of "cash or you can't afford it". Consumers spend differently when they are handing over cash. They bargain hunt more, defer optional purchases, and invest more money.
Before too long you will find you have no need of debt instruments. Even a mortgage is easy to get if you have sufficient cash reserves, but you may not even need that with careful investing.
People will talk about the importance of a credit rating. I have been without debt long enough that I have no credit rating. The habits that got me to this point have also put me in a position where I can pay cash for anything I need - car and house included.
Potential employers (software and services indistry) who have checked my credit rating have held its absence to be a positive. (Disclaimer - one of those potential employers was the Lampo Group, which promotes debt free living) I look after the resources I have, so I never need debt anymore.
If I had known when I was twenty what I know now:
I would have never taken a credit card
I would never have taken a car loan
I would have invested more of my money in low turnover aggressive growth mutual funds
I would have paid attention to my expenses, using a zero based budget
Following that path, I would have reached my current financial situation some 25 years earlier.
Rather than post all of the responses to the defenses of credit cards in comments, I'll add them to the answer, already researched and composed better than I have the time to do on my own. I recommend reading the much more details and entertaining originals.
Edit 3 Abridged From https://www.daveramsey.com/blog/credit-card-qa-with-dave .
Is there ever a good time to have a credit card? NO. NEVER. When you play with snakes, you get bitten.
"I pay mine off every month."
CardTrak, who gets their information from the credit card companies, reports 60% of people don't pay your credit cards off every month. Cambridge Consumer Credit Index found that 47% of balance holders only make the minimum payment. A study by Dunn and Bradstreet showed that the credit card user spends 12 to 18% more when using credit instead of cash. After McDonald's began taking credit cards, they found that people spent $5 to $7 more per sale.
"They give me airline miles."
Consumer Reports says 75% of the airline miles are never redeemed.
"I need it for travel and to buy stuff online."
Dave Ramsey: "Between media appearances and live events, I guarantee I travel more than most of you, and I do it all with a debit card. I don't have a credit card. I buy things online, stay in hotels and rent cars all the time using my debit card. The only thing the debit card won't do is get you into debt."
"I have to build my credit."
Lenders are telling you to get debt so you can get more debt. Your debt is how they earn money.
"What about buying a house?"
Since you aren't "building your credit" you will need to find a mortgage company that does actual underwriting. You can qualify for a conventional 15-year fixed-rate loan.
The big question is, What do millionaires do? They don't get rich with free hats, brownie points, or air miles. What do broke people do? They use credit cards.
From https://www.daveramsey.com/blog/excuses-to-keep-credit-cards, 6 lies that people believe about credit cards:
1. “They’re so easy to use compared to cash.”
True. Unfortunately, that also means it’s easier to overspend.
A study by Carnegie Mellon, Stanford and MIT even showed a difference in brain activity when we use credit cards instead of cash.
2. “They’re great in case of an emergency.”
Instead of using a credit card, build up an emergency fund of 3–6 months of living expenses and rely on that the next time a true emergency happens. Then it just becomes a minor inconvenience.
Personal aside: when I came home from vacation to find my house flooded, while I was still getting out of the debt hole, I never had to touch my emergency fund BECAUSE I had the cash on hand to cover the expense of repairs. Typically there is a drawn out process between the bank and insurance company, which the bank waived, cutting a 4 week process to 1 day.
3. “They give us rewards, points, miles, or cash back!”
No one ever got rich off a rewards program.
4. “They’re easy to pay off every month.”
Maybe. But life happens and people fall into traps. CardTrak, reports 60% of people don't pay their credit cards off every month. Credit Index found that 47% of balance holders only make the minimum payment.
5. “They’re necessary to build a credit score.”
So why would you want a high credit score? Because it allows you to take on even more debt in the future?
The truth is, you can qualify for a mortgage and rent an apartment with zero credit (which will happen eventually if you stop borrowing altogether). And for everything else—even cars—pay cash. No credit score needed.
6. “They make our dreams reality.”
Credit cards give us opportunities we would never have otherwise. It’s all about instant gratification, right?