Consumers often confuse store credit cards with retail rewards cards. The latter enable shoppers to buy from many different vendors, while store card spending is restricted to participating merchants.

If Canadians signed up for credit cards from each of their favourite shopping destinations, they could fill their wallets with store-specific cards. But would that pile of plastic really save money?

The good: Store cards have attractive features
Retail store credit cards are typically unfettered by annual fees. However, their most distinctive goodie is that consumers can instantly qualify for credit financing. Store card marketing materials and applications are often positioned close to cashier checkouts so that staff can quickly enroll customers to fund on-the-spot sales.

Interest costs may be waived under store card financing, at least temporarily. With the Home Depot Consumer Credit Card, no interest is due for six months after consumers charge more than $299 for online or in-store purchases. The Future Shop Card is interest-free for up to 12 months and qualifies for product-specific financing specials during the year. The Staples Enterprise Personal Credit Card provides six or 12-month financing plans for its office supply products.

The Sears Card is a unique hybrid product. That store card also generates rewards, with more points awarded for Sears merchandise purchases. However, any financed buy under the Sears Card is ineligible for rewards points.

Store card discounts and other perks are generally available to all shoppers, anyway. The HBC Credit Card does extend its standard 30-day merchandise return policy to 90 days, which can be a valuable benefit, particularly for electronic products.

Tip: Signing up for multiple store cards in a short period of time can temporarily ding your credit score.

The bad: Store credit card APRs are expensive
The annual interest rate on many store cards approaches 30 per cent. Among the following retailer APRs, some are three times higher than the fixed 9.99 per cent available under the Gold MasterCard, a low-interest credit card.

• IKEA Credit Card charges 29.99 per cent.
• Future Shop Card and HBC Credit Card charge 29.9 per cent.
• Home Depot, Lowe's and Staples Credit Cards charge 28.8 per cent.
• Sears Card charges 19.99 per cent.

To understand how onerous these rates are, consider a $10,000 balance towards which the cardholder repays $300 monthly. The IKEA Credit Card costs $11,756.63 in interest compounded over the six years and one month it takes to pay off the initial $10,000 expenditure. That amounts to $9,994.66 more in APR charges than under the Gold MasterCard, and scheduled payments persist for an extra two years and nine months.

Tip: To compare the costs of different APRs, use the FCAC Credit Card Payment Calculator Tool.

The ugly: Store card penalties are brutal
Miss the monthly payment deadlines or fail to repay the full amount within the promotional period, and additional interest is payable immediately. Making that financial shock even more distressing, the interest due is backdated to the original purchase date -- not from when the cardholder missed a payment. For example, an IKEA cardholder who failed to satisfy all terms and conditions for the $10,000 purchase over a six-month promotional period would face a jaw-dropping $1,499.50 interest bill.

Store card financing can also involve hidden administrative fees, like the $69.99 charge per financing deal buried in a footnote on the Future Shop Card's marketing materials.

Finally, most store cards also allow consumers to choose optional credit card balance insurance. After insurance premiums are added in, the annual cost for the IKEA Credit Card spikes to 42.83 per cent. Depending on the cardholder agreement, consumer payments are usually applied first to insurance premiums -- leaving unpaid high-interest amounts to compound.

Tip: Before signing up, read the store cardholder agreement and itemize all costs.

The final verdict
For cardholders who consistently pay their bills on time, store credit cards can serve as low-cost bridge financing when a specific type of merchandise is needed.

The key question for others to answer honestly is: "If you can't afford the purchase now, how are you going to cope with those charges plus interest under the store credit card later on?"

All consumers should carefully consider how much of their overall spending a specialized card will satisfy. Even one store card requires additional time and effort to manage before month-end.

Tip: For more diverse shopping needs, low interest and rewards credit cards are often a better fit.

See related: Loblaw outlaws gift card purchases via credit card; Will Rogers credit cards offer high tech perks?