Millennials are less likely to own a credit card than any other age group.
According to a new Bankrate.com study, 63 percent of individuals aged 18-29 don't own a credit card. This holds true for 35 percent of adults 30 and over, nearly half the number of the younger generation.
Jeanine Skowronski, a credit card analyst with Bankrate.com, says millennials are debt averse because they grew up witnessing the Great Recession and have already faced struggles with student loan debt and a struggling job market.
"Millennials may think they're staying out of financial trouble by forgoing credit cards, but they're actually doing a disservice to themselves and their credit scores."
Skowronski noted that more Americans, in general, are relying less on credit cards. "The population has become more credit card shy. There is debt aversion for all ages."
There are many ways to build a credit score, but none as quick or efficient as owning and using a credit card. Good credit scores are essential for qualifying for jobs, mortgage and auto loans, insurance policies, and even apartments.
"Using credit cards responsibly comes down to a mentality shift: Don't think of it as debt," said Skowronski.
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But some millennials don't buy that. Zach Mowry, 22, doesn't use credit cards. "I fear going into debt even without a credit card. I feel like if I got one it would only speed that process" said Mowry, who works in a hotel and conference center in Roanoke, Virginia.
He also said he's wary of "increasingly insecure security measures from the credit card companies themselves. It becomes a trust issue when I have to worry about my credit taking a hit because some jackass hacked a batch of cards."
Still, even though preferred by millennials, debit cards do not have the same fraud protection as their credit counterparts in terms of liability. Theft of a debit card can be a nightmare for cardholders because it is a direct connection to their bank account. Credit cards, however, are connected to the bank and unauthorized charges can be dealt with more quickly. Earning rewards on purchases is also a boon.
Of the 37 percent of millennials that do have at least one credit card, only 40 percent pay their balances in full each month, compared with the 53 percent of adults 30 plus.
Three percent admit to often missing payments altogether.
—By CNBC's Sarah Whitten