Of the 18.7 million current accounts held by Belgians, about 1.2 million were in the red at the end of 2019. That equates to 6.4 percent of the bills. The trend is clearly declining, because at the end of 2014, 9.4 percent of the 16.2 million current accounts were still in the red, according to figures from the banking federation Febelfin. High debit interest rates are charged for an account below 0. Banks are bound by maximums, but interest rates generally rise to more than 10 percent on an annual basis.
The fact that Belgians have become more budget conscious in recent years has a lot to do with the growing use of banking apps. With the app on their smartphone, they have a constant view of the balances of their accounts. That also means that they can react more quickly. At BNP Paribas Fortis, the average customer checks the balance of his accounts on the app, for example, 20 times a month.
According to the banks, the strong growth of e-commerce is also playing a role. ‘We see that smaller purchases are made more often with the credit card, rather than that the customer goes below 0. Online purchases are probably not alien to this, ‘says ING. BNP Paribas Fortis sees that customers are making more use of automatic payment orders and direct debits. ‘As a result, they pay more attention to their budget management,’ it says.
Corona
It is striking that the downward trend will continue in 2020, in full corona crisis. “Since the start of the crisis in March, the share of customers with a negative balance has fallen even more sharply than in previous years,” says Ulrike Pommee of Belfius. At BNP Paribas Fortis, the overruns – the sum of all balances below 0 – were nearly 30 percent lower in June and July than in the same months in 2019. KBC also speaks of a remarkable decrease. “The much more limited consumption options due to the lockdown and the financial prudence of some consumers may have contributed to this,” it says.
“Since the start of the crisis in March, the share of customers with a negative balance has fallen even more sharply than in previous years.”
BNP Paribas Fortis also refers to government support measures. “These measures have reduced the pressure on the accounts, despite the loss of income,” it says. More than 120,000 Belgians have made use of the payment deferment for home loans in recent months. A condition for eligibility for the aid was that the mortgage borrowers had no more than 25,000 euros in savings.
The decrease in the number of current accounts in red goes hand in hand with the growth of deposits on the current accounts with a positive balance. At the end of 2019, according to figures from the National Bank, 89.4 billion euros was parked in Belgian current accounts, 74 percent more than at the end of 2014. Taking into account the 17.5 million current accounts with a positive balance, the average amount per current account comes to approximately 5,100 euros. . Since savings accounts hardly yield any interest, many Belgians save themselves the trouble of transferring money from the current account to the savings account. The vast majority of current accounts do not earn interest. The interest on most regulated savings accounts amounts to the legal minimum of 0.11 percent.