'I don't need a credit card' – is a statement that we have all heard. I guess, back in the 90's it was eminently possible for someone to survive without a credit card, but plastic money is the reality of the present century and I can't imagine anyone living without one.

For starters, we all need credit. How many people can actually afford to pay for a car or house with hard cash? Most middle income families need to apply for bank loans to make large purchase and in order to get that loan, you need a high FICO credit score. FICO score is basically the credit score that you maintain. So if you never used a credit card to make small purchases and conscientiously paid for them, banks will won't be able to tally your credit record history, something which they need to do to be sure that they will recover their money.

Consumers who insist on paying for things with cash, may feel proud of their achievements but banks and other lenders tend to see them as high risk clients. That's because these people don't have a verifiable track record to prove they will be pay off the loans they take.

A couple of decades back, mortgage brokers used such verifiable records like rental history and utility accounts to assess a clients 'liability' potential. However, such practices are rapidly becoming obsolete and lenders becoming increasing weary to lending to clients who don't have a spotless credit history. The benign 'lets make this work' platitude is fast getting replaced with an 'I don't trust you' attitude. So unless a lender is sure that his client is a low-risk, rock solid borrower, they simply won't part with their money. Thus your FICO score is the be all and end all of your potential as a credit taker.

It's a fact that some people are actually scared of applying for a credit card. It's as if the second they get a credit card in hand, they will binge shop their way to bankruptcy. A credit card like all powerful assets should be used responsibly. You can actually have a set of rules to limit the use of your credit card. By saving it for emergencies and large purchases, you will never exceed more than ten percent of your available credit. This will help you to pay on time, which would help you maintain a great FICO score.

Credit cards being a liability is clearly a myth. For example, through judicious use of your rewards card, you can earn thousands of reward dollars in a year, which can be redeemed at the end of the year. For most consumers year-end rewards translates into saving several hundred dollars worth of gifts at the end of year.