APR vs borrowing rate: the difference, with real numbers

The borrowing rate (taux débiteur) is the only rate that produces interest on your balance. The TAEG, Belgium's version of the APR, is a comparison figure: it takes that rate, adds the mandatory costs and expresses it per year. At Cetelem, a 13.85% borrowing rate gives a 14.49% TAEG. At KBC, 8.97% gives 9.35%, with no fees.

What is the difference between the TAEG and the borrowing rate?

The borrowing rate says how much interest the lender charges. The TAEG says what the credit costs in total. The confusion starts there, and almost nowhere else.

Directive 2008/48/EC, transposed into Book VII of the Belgian Code of Economic Law, defines the borrowing rate as the interest rate, fixed or variable, applied on an annual basis to the amount of credit drawn. It defines the TAEG as the total cost of the credit, expressed as an annual percentage of the total amount of credit. The contract's mandatory costs go into the second, not the first.

A real example. Cetelem card: annual fee €5, variable annual borrowing rate 13.85%, TAEG 14.49% on a credit line of €1,500. Tariff read on the issuer's page on 1 October 2026, with the rate stated as valid at 1 June 2025.

Which rate is used to calculate interest on a carried-over balance?

The borrowing rate, always.

The TAEG is never applied to your balance. It is a comparison figure, calculated once before signing, on a standard assumption. Cetelem writes it into its general conditions (May 2022 version, article 2.3): interest is obtained by multiplying the outstanding balance by [(1 + borrowing rate)^(X/365) − 1], X being the number of days the balance did not move, and it is charged each month in arrears.

The figure to remember: €1,000 left for twelve months without repaying produces €138.50 of interest at 13.85%. With the €5 fee, that makes €143.50. Applying 14.49% to the same balance would give €144.90, which the statement will never charge.

In the files I handled, the cardholder arrived with the brochure's TAEG and a statement that did not match to the decimal. The statement was almost always right. It applied the borrowing rate, day by day, to the actual balance.

Why is the TAEG higher than the borrowing rate?

For two separate reasons, and one card can have only one of them.

The first is fees. At Cetelem, the €5 fee adds to the interest. On a €1,500 line repaid in twelve instalments of €134.01, interest comes to €108.06 and the fee brings the cost to €113.06. Recalculated, that cash flow gives an effective rate of 14.48%, one hundredth away from the published 14.49%.

The second is compounding. KBC's basic credit card has no annual fee, and yet an annual borrowing rate of 8.97% becomes a TAEG of 9.35%. The gap is not a fee. 8.97% split into twelve months of 0.7475%, compounded, gives 9.35% again. KBC's page lists its assumptions: a €0 fee, a variable borrowing rate of 8.97%, a one-year term, repayment in monthly instalments. With them, 9.35% is only reachable if interest is counted each month at 8.97% divided by twelve. My own calculation.

At KBC, this TAEG applies only to the Flex Budget instalment option. A deferred-debit card settled in full costs no interest at all: the mechanism is covered in the article on the interest-free credit card.

TAEG, monthly rate, actuarial rate: how do you convert them?

Three ways of writing the same rate, and none is divided by twelve without care.

For an annual actuarial rate like Cetelem's 13.85%, the equivalent monthly rate is (1 + 0.1385)^(1/12) − 1, or 1.0868% per month. Dividing 13.85 by twelve would give 1.1542%, a rate that is too high, because it ignores the fact that interest already earns interest. Conversely, a nominal rate like the one implied by KBC's TAEG assumptions is divided by twelve, provided you then compound it to get back to the TAEG.

The KBC column is a reading by recalculation, not a quotation from the issuer. The Cetelem column follows from the formula in article 2.3, which raises (1 + rate) to the power X/365. The simulator in the article on calculating credit card interest applies exactly this monthly rate.

Does a fixed borrowing rate protect against an increase?

In principle yes, but only if the contract says so. A fixed rate is written in at signing and does not move by itself. A variable rate follows the index the contract provides.

The Cetelem card is the second case: the applicable borrowing rate varies with the legal maximum TAEG (May 2022 conditions, article 2.3), and the issuer's page gives it as valid only at a date, here 1 June 2025. That legal ceiling is itself revised. The maximum TAEGs for credit lines are set by the royal decree of 14 September 2016 and stayed unchanged in the revision that took effect on 1 December 2025, according to the FPS Economy, the federal public service for the economy.

At KBC, the TAEG assumptions also describe the 8.97% as a variable rate (page read on 1 October 2026). A rate shown without a date is only a snapshot: the only one that counts is the one in your contract, on the day you borrow.

Does the advertised TAEG match what you actually pay?

Only if you borrow like the standard assumption. Cetelem's TAEG rests on €1,500 drawn at once and repaid in twelve equal instalments, the €5 fee included. Borrow less, and that fixed fee weighs more.

Calculations of 1 October 2026 at 13.85%, twelve equal instalments, fee counted at the last instalment.

The figure to remember: on €300, the same card works out at 16.98% a year, not 14.49%. Over twelve months, that is €26.61 for €300 borrowed. This effective rate is not a TAEG in the legal sense, it is simply what the fee does to small balances.

Five lines of the contract that give the two rates

• the annual borrowing rate, stating whether it is fixed or variable and its validity date;
• the TAEG, with the figures it rests on: amount, term, number of instalments;
• the annual fee and any mandatory cost counted in the TAEG;
• the method used to calculate interest in the general conditions, daily or monthly;
• the date the tariff was read at the issuer, without which no figure can be compared.

What can you do if the statement does not match the contract rates?

Ask the issuer for the detailed statement, in writing, keeping the date you sent it: borrowing rate applied, number of days, fees included. Only then compare.

If the answer settles nothing, a written complaint to the complaints department opens the way to Ombudsfin, the Belgian financial-sector ombudsman, which only examines a file after that first step. If it is the balance itself that becomes hard to repay, an accredited debt mediation service or the CPAS (the public social welfare centre) of your municipality will help free of charge. I do not give advice on a situation I do not know.

The ranking of Belgian credit cards lists the fee, TAEG and cost of a withdrawal card by card, the comparison tool puts them side by side, the choose your card page sorts by situation, and the article on credit card interest details how a carried-over balance works.

Sources. Definitions of the borrowing rate and the TAEG, Annex I equation: Directive 2008/48/EC, transposed into Book VII of the Belgian Code of Economic Law. Maximum TAEGs: royal decree of 14 September 2016, maximum rates published by the FPS Economy, revision of 1 December 2025. Recourse: Ombudsfin. Cetelem card, fee, borrowing rate, TAEG and €1,500 example read on 1 October 2026 on the official Cetelem card page (rate valid at 1 June 2025); interest calculation method: Cetelem general conditions, May 2022 version, article 2.3, consulted on 1 October 2026. KBC credit card, fee, borrowing rate and Flex Budget TAEG read on 1 October 2026 on the official KBC Flex Budget page. All recalculations on this page were made on 1 October 2026. No link in this article is paid.