Credit card © Floresco Productions, Corbis

For Leslie Hartley, a 25-year-old college student in Oklahoma City, credit cards aren't a convenience or a way to buy stuff she can't afford. They're just a hassle.

"It makes it easier to have one less bill to worry about," Hartley wrote on my Facebook page. "I'd rather not have the temptation that comes with having one though till after I'm done with school."

Lauren Lang, 27, didn't feel the need for a credit card, either -- until she wanted to buy a car a couple of years ago. She discovered she had no credit scores. "Zip, zero, zilch." Her student loans, which she'd paid off, no longer appeared on her credit reports. Without other credit accounts, she didn't have enough credit activity to generate scores, so she couldn't get a loan.

Lang, a video producer in Northglenn, Colo., said her mother had "straight up told me" not to get a credit card in college, and Lang listened.

"I now believe that was a mistake," Lang said, "because I wasted years that I could have been using to build credit paying in cash."

Today's younger adults have vastly different attitudes about credit cards than their elders. Some of latest research findings:

  • The proportion of young people without credit cards has nearly doubled. Among people who had enough credit history to generate a FICO credit score, 16.1% of those aged 18 to 29 had no credit cards in 2012, compared with 9.3% in 2005, according to an analysis of credit bureau records by FICO. Among people 60 and older, just 2% of those with credit histories had no cards in 2012, said FICO senior principal scientist Frederic Huynh. (The study didn't capture the estimated 50 million American adults who don't have enough credit history to generate a FICO score.)
  • Those who have credit cards are less eager to use them. Only 15% of those aged 18 to 35 said they tried to use their cards for as many purchases as possible, according to a Mercator Advisory Group study, compared with 21% of the total population surveyed. Just 24% of younger people preferred using credit cards for their online purchases, said Karen Augustine, the manager of the company's CustomerMonitor Survey Series, compared with 34% of the general population and 45% of those 65 and over.
  • They're trimming their credit card debt. All age groups reduced their credit card debt between 2005 and 2012, but the youngest adults did so most dramatically. People aged 18 to 29 in the FICO study cut their credit card debt by nearly one-third, from $3,073 to $2,087.
  • They prefer debit. People aged 18 to 35 are three times more likely as those 65 and over to say they use debit cards as a way to avoid borrowing, Mercator's Augustine said.

"They really don't want to borrow money on a credit card, and I don't blame them," Augustine said. "Look at what happened to their parents."

FICO's Huyhn likened the impact of the Great Recession on today's young people to that of the Great Depression on an earlier generation.

"In their formative years, when they see what their parents went through," Huyhn said, "it did scare them to the straight and narrow in terms of how they perceive and use credit."

The Credit CARD Act of 2009, which placed significant new restrictions on credit card issuers, also has played a role in credit cards' declining popularity among the young, Huyhn said. To be approved for a card, people under 21 now must either prove their ability to pay a credit card bill (typically with income from a job) or get a co-signer.

Young people's aversion to credit cards is a classic good news/bad news scenario, said John Ulzheimer, the president of consumer education at SmartCredit.com.

"The good news is that more young people are staying out of credit card debt, which is pretty expensive to carry, with an average interest rate of around 15%," Ulzheimer said. The bad news, he said, is that "prepaid debit card issuers have a full-court press on young people and minorities."

He said such cards are poor alternatives because their fees are much higher and "next to impossible to avoid."

"And (prepaid cards) offer no credit-building benefits, despite rumors to the contrary," he said.

Image: Liz Weston

Liz Weston

Another common myth is that people have to be in debt to have good credit scores. In reality, carrying balances isn't required -- and it's certainly not a good idea for your overall financial health. Establishing a couple of credit card accounts that report to all three bureaus and paying the balances in full every month is enough to build a solid credit rating.

Young people also may be misled by news stories about lenders developing alternative tools, other than credit scores, to evaluate applicants who have thin or nonexistent credit histories. Such tools aren't in widespread use, and those who get approved using alternative methods may find themselves paying higher rates than someone with good credit scores.

Even when alternative information is collected by credit bureaus -- Experian, for example, now collects rental payment information from some landlords -- the data aren't incorporated into the FICO scores that most lenders use.

"Having solid FICO scores is still the best way to get great deals from mainstream lenders," Ulzheimer said.

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Liz Weston is the Web's most-read personal-finance writer. She is the author of several books, most recently "The 10 Commandments of Money: Survive and Thrive in the New Economy" (find it on Bing). Weston's award-winning columns appear every Monday and Thursday, exclusively on MSN Money. Join the conversation and send in your financial questions on Liz Weston's Facebook fan page.

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