Credit card interest: how it is actually calculated

How does credit card interest work?

It only applies to what you do not repay. A Belgian deferred-debit credit card produces no interest at all as long as the statement is settled in full on the due date. As soon as part of the balance is carried over, that part becomes borrowed capital, and it is charged until the last euro is repaid.

That distinction was missing from most of the cardholders who called my department. They thought they were paying interest "on the card". They were paying interest on a specific sum, from a specific date, and the statement line said so — badly, but it said so.

Two mechanisms coexist on the Belgian market, and they do not cost the same. A deferred-debit card takes the whole statement from your current account on a fixed date: nothing carried, no interest. A card attached to a cash reserve opens a credit line the day you sign: every purchase is spread automatically and bears interest from the first month. Both cards carry the word "credit". It does not mean the same thing.

APR or borrowing rate: which one should you read?

The APR. The borrowing rate is the interest rate alone; the APR — TAEG in French, JKP in Dutch — adds the compulsory costs of the credit and expresses the whole as an annual percentage comparable between issuers.

The figure to remember: Belgian law caps the APR, not the borrowing rate. A contract advertising a 13.98 % borrowing rate while its APR sits at 14.49 % is doing you no favour — the gap between the two is precisely what the credit costs on top of the interest.

How is interest on a carried balance calculated?

The annual rate is reduced to a daily or monthly basis, then applied to the outstanding balance at each period. Nothing more.

A worked example, at an APR of 14.49 %. A balance of €1,000 left for a full month costs roughly €12 in interest. Over twelve months, that comes to roughly €145. Each period restarts from the new balance: unpaid interest is added to the capital and earns interest in turn. That small compounding effect is why a card debt grows faster than the advertised rate suggests.

What the brochure does not put forward: cash withdrawals carry no grace period. Interest runs from the day of the withdrawal, even if the statement is settled in full on the next due date. That was by far the most disputed line on my desk, and almost never successfully — because it is correctly applied and correctly written into the terms.

Why does the minimum payment stretch the debt?

Because it is set as a percentage of the balance, never against a repayment term.

At Cetelem, the Maestro card attached to a cash reserve requires a minimum payment of €25 a month, or roughly 5.6 % of the amount drawn. Annual fee €5, APR 14.49 %, rate surveyed at the issuer on 23 August 2026. On a €1,000 balance, the minimum payment is therefore €50, of which around €12 goes to interest in the first month. That leaves €38 actually reducing the debt.

And because the minimum is a percentage of the balance, it falls as the balance falls. The debt never closes by itself: it flattens.

What is the zeroing deadline, and what happens if you miss it?

Zérotage — zeroing — is the obligation to bring the balance of your credit facility back to zero within a deadline written into the contract. It is a purely Belgian rule, and it is the most effective protection against carrying a card balance indefinitely.

Since 1 January 2013, any credit facility of indefinite duration or set for longer than five years must provide for a zeroing deadline. For a facility of €5,000 or less, the legal maximum is five years. The issuer remains free to set a shorter one, and many do. The clock starts when you use the card, and a new deadline restarts at the first use following a balance brought back to zero.

What the issuer looks at first: the zeroing date, not the amount. A reserve drawn to €300 against a €3,500 limit raises no issue as long as the balance returns to zero in time; a €300 balance that has not moved in four years does.

In the files I handled, cardholders discovered this clause when their card was blocked, never before. The consequences stack up: the card stops working, late interest may apply to the remaining balance, the contract may be terminated, and the default is recorded at the Central Individual Credit Register — the Centrale des Crédits aux Particuliers, a national database of consumer credit contracts and defaults held by the National Bank of Belgium. That record governs access to any later credit, and anyone listed can consult their own file free of charge at the National Bank.

The date appears in the specific conditions of the credit agreement. It does not appear on the monthly statement.

What APR do Belgian issuers apply to a cash reserve?

Between 9.50 % and 16.50 % depending on the issuer and the formula, rates surveyed on 23 August 2026. The annual fee and the APR do not move together: cards with a €0 annual fee generally carry the highest APRs.

Rates surveyed at the issuers and on their public pricing pages on 23 August 2026, except Beobank and Argenta surveyed on 18 August 2026. The Cofidis APR is shown as a range because it depends on the application: it is the only one of the six whose rate is unknown before approval.

Over twelve months, that makes a clear difference. A €1,000 balance carried all year costs roughly €95 at 9.50 % and roughly €165 at 16.49 %. The €70 gap exceeds the combined annual fees of all six cards.

Is credit card APR capped in Belgium?

Yes, and the mechanism is precise. Maximum APRs are set by the Royal Decree of 14 September 2016 on the cost of credit, adopted under Book VII of the Belgian Code of Economic Law — the book that governs consumer credit and payment services in Belgium — and published by notice in the Belgian Official Gazette.

For credit facilities — the category covering credit cards with spread repayment — the reference index is the monthly average of three-month Euribor. It is reassessed in March and September. The cap moves only if the index has shifted by at least 0.75 percentage points since the last adjustment, and the new maximum takes effect on the first day of the second month following publication.

One detail few comparison sites mention: the law allows a higher cap when the credit facility is drawn by means of a card. The same borrowed sum is therefore legally more expensive through a card than through an authorised overdraft on a current account. In the most recent revision, effective 1 December 2025 and published in the Official Gazette of 8 October 2025, caps on instalment loans above €5,000 fell by one point; those on credit facilities were left unchanged.

What if the balance no longer clears?

Raise it before the default, not after. A credit agreement can be renegotiated as long as it is not in default; once the record has been entered at the Central Individual Credit Register, the room to manoeuvre narrows sharply.

Three points of contact exist in Belgium, and none of them is the issuer. An approved debt mediation service (médiation de dettes agréée) or your municipal CPAS — the local public social welfare centre, present in every Belgian commune — support blocked repayment situations free of charge. Where the dispute is with the issuer itself — a contested statement, a refused repayment plan, a clause applied differently from the contract — the recourse is Ombudsfin, the ombudsman for the Belgian financial sector, who can be approached after a written complaint has gone unanswered or been answered unsatisfactorily.

I do not give advice on a situation I do not know, and no one should do so from an article. These three doors exist, they are free, and they open more easily early than late.

What to check on your contract

Four lines, in this order. The APR applied to a carried balance. The zeroing date, in the specific conditions. The minimum payment, in euros and as a percentage. And the debit mode: deferred, or spread automatically.

The three figures I look at first on any card remain the annual fee, the APR applied to a carried balance, and the cost of withdrawing €100 from a cash machine. On a card attached to a cash reserve, the second weighs more than the other two combined.

The ranking of Belgian credit cards sets out these amounts card by card, the comparison tool puts them side by side, and the choosing guide sorts by situation rather than by product.

Sources — maximum APRs and adjustment method: Royal Decree of 14 September 2016 on the cost of credit, articles 11 and 12 and annex 2, adopted under Book VII of the Belgian Code of Economic Law; maximum rates published by the FPS Economy, revision effective 1 December 2025, notice published in the Belgian Official Gazette of 8 October 2025. Zeroing obligation applicable since 1 January 2013 to credit facilities of indefinite duration or longer than five years. Central Individual Credit Register: National Bank of Belgium. Consumer credit and recourse: FPS Economy. Card rates surveyed on 23 August 2026 on the public pages of Cofidis, Carrefour Finance, Cetelem and Santander Consumer Bank; Beobank and Argenta surveyed on 18 August 2026. No link in this article is paid.