As far as I know there are only two necessary reasons for collaring a cat:
1) so that you have a place to hang identifying tags and vaccination records
2) so that you can hang a bell to prevent your cat from killing birds and rodents
(I won't address decorative reasons in this response.)
If your cat is an indoor cat and a collar is not needed micro-chipping would be the best plan. The only thing is that if your cat gets outside and someone who doesn't know about micro-chipping finds him you may not get him back if that person decides to adopt your cat. On the other hand vets may have a protocol to check for microchips when cats are brought in, so if someone decides to adopt your cat and takes him to a vet then there is a good chance your cat will be returned. I would check with your vet and ask if all vets are required to check for microchips when they treat an animal.
However, even if your cat is an outdoor cat or if there is a chance your cat could get outdoors I would recommend getting a collar for your cat to hang a bell on. And I would also get the micro-chipping anyway just so your cat can be identitied because tags can fall off collars
One problem with collars is that if your cat is an outdoors cat and if the collar gets caught on something and your cat is unable to free itself, your cat could starve to death or fall victim to a predator.
There are two types of collars that cats can get out of if the collar gets caught and one of these should be chosen. One is an elasticized type that stretches and that your cat can withdraw its neck from. The only drawback is that if your cat is not accustomed to wearing a collar he might end up doing what my cat did--which was to put his forelegs through it--and then it would end up around his belly, constricting his bowels.
There is a second type of collar that is called a safety collar. This collar is considered the safest because it breaks when pressure is applied. I haven't tried this on my cats because they are indoor cats and don't need to wear collars, but you might want to ask your vet about these collars.
I am for bells. The estimated numbers of pet cats in urban and rural regions of the United States have grown from 30 million in 1970 to 60 million in 1990. Cats kill over 70 million songbirds a year in this country. Cats are decimating the bird populations even though the cats are well-fed and have no reason to hunt. Even cats that have not been taught to hunt can be efficient hunters. I would recommend belling your cat to preserve the song birds in your area and also it would save you the heartache of having to pick up and dispose of the carcass of a beautiful little bird that your cat drug in. Also be aware that just because your cat doesn't bring any birds home doesn't mean it may not be killing them. When I was a kid there was a neighbor who had a cat that would take a mouse door to door to get people to put out food, but he never took the mouse to its owner, probably because it had been punished for doing that in the past.
Be aware that some cats, as mentioned in the article below, are learning to walk carefully so their bells remain silent. You might try to find a collar where more than one bell is or can be attached. One thing that could help is to choose a bright collar so that your cat is more visible to birds.
I have talked to people who have belled their cats and the cats don't mind the bells. Come on people, it's not like they are having gongs going off in their ears. People who say that cats should not be belled don't understand how cats are decimating the bird population. I know about this because my parents track bird populations for the state they live in. I want those who say cats should not be belled to think about how they would like it if songbirds disappeared altogether. I bet they would change their tune altogether. If your cat is a birder make it an indoor cat.