Man pulling one dollar bills from a leather wallet.

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The number of Americans with credit cards is on the way up, but a large portion still aren't using them. When we researched credit and debit card market shares, we found just 72% of American adults had a credit card in 2018.

On the one hand, it's good that so many adults are using credit cards. However, almost 30% still don't have one. To understand why this is an issue, let's look at four ways that not having a credit card can cost you money and make life more difficult. 

1. It's harder to build your credit

A credit card is one of the simplest and best ways to build credit. If you use a credit card and make payments by the due date, you'll build a good payment history. Payment history is the most important factor in calculating your credit score. The amount of time you've had a credit account also plays an important role.

It's not necessarily impossible to build credit without a credit card. Other types of payments, such as loans, can also count toward your credit score. Some scoring models even look at utility and rent payments. But the process is easier and often faster with a credit card.

2. Credit cards are more secure than debit cards and cash

In terms of security, credit cards have major advantages over cash and debit card payments.

Both credit cards and debit cards offer fraud protection, but there are some key differences:

  • Legally, you can only ever be liable for up to $50 in credit card fraud, and most card issuers offer zero-liability policies. In contrast, legal liability for debit card fraud varies based on how quickly you report it. And if you take too long, there's no limit.
  • In the event of debit card fraud, the money will leave your bank account. You can dispute it, but you may need to wait for the bank to investigate before you get the money back. In contrast, you're not out any money from credit card fraud. You can dispute it, and you won't need to pay the unauthorized charges. 

If you pay in cash, your wallet can get lost or stolen. In that case, you'll lose whatever money you had with you. If your credit card is stolen, you can just get it replaced with a new one.

3. You won't earn purchase rewards or sign-up bonuses

Rewards are one of the ways the best credit cards provide value for cardholders. Some people are put off by a false impression of complicated points systems. But that couldn't be further from the truth. Rewards cards come in all flavors, from easy-to-use cash back cards to travel credit cards.

You earn rewards on every purchase with these types of credit cards. Purchase rewards add up and could get you hundreds back per year. Many rewards cards also offer sign-up bonuses as an incentive for new cardholders. The biggest sign-up bonuses can be worth $500 or more, so you could collect a lot of cash or points for opening a new credit card.

Considering the kind of value credit card rewards offer, you're leaving money on the table if you don't have one.

4. You won't get credit card purchase and travel protections

Many credit cards offer extra protections that automatically apply to eligible purchases. Common examples include:

  • Cell phone insurance
  • Purchase protection
  • Price protection
  • Extended warranty coverage
  • Rental car insurance
  • Lost and/or delayed baggage insurance
  • Trip cancellation/interruption insurance

Protections vary from card to card. If this is something that's important to you, then you could specifically look for credit cards with the coverages you want.

These benefits can give you peace of mind without costing anything extra. Instead of paying for an extended warranty or taking on a monthly cellphone insurance bill, you can find a credit card that offers it free of charge. Some debit cards offer protections of their own, but it's not nearly as common.

A must-have for every consumer

With all the benefits that credit cards offer, it makes sense to have at least one. Not only is it a secure payment option, you'll also build your credit and get added value when you use it -- including rewards and complimentary protections.

If you don't have a credit card because you're worried it will cost you money, that's easily avoided. Simply stick to no-annual-fee credit cards and avoid pesky interest charges by paying your credit card bill in full every month.