신용카드 시장의 높은 이자율의 원인에 관한 연구: 도덕적해이와 역선택문제를 중심으로

Ausubel (1991) reported that interest rate stickiness was present in the US credit card market, which in turn led to a market failure, citing switching costs, adverse selection problems and consumer irrationality as prime culprits. Furthermore, Zwicki (2000) and Park (1997)pointed out moral hazard of credit card users which eventually raised interest rates of the market. As mentioned in the introduction, interest rates of the Korean credit card market are fairly high. Based on previous studies, this study examines whether interest rate stickiness exists in the Korean credit card market, and whether adverse selection and moral hazard issues are present due to the high interest rates. If there are problems of adverse selection and moral hazard in the domestic credit card market, it may explain the rationales behind high interest rates. If it is not the case, however, it may indicate that the market should lower the credit card interest rates. Major findings of this study are as following. First, interest hikes of credit cards due to increases in borrowing rates are greater than interest declines due to decreases in borrowing rates of the previous month. This clearly confirms that there exists interest rate stickiness in the domestic credit card market. When delinquency rates are considered, the model becomes more relevant and the stickiness of interest rates affected by changes in borrowing rates becomes greater. Meanwhile, when finance limits expand, finance balances of high credit rating groups hardly change while those of low credit rating groups do rise. This reveals that adverse selection issues are relevant to the credit limit. Considering that previous studies failed to reach an agreement over adverse selection pertaining to interest rates, the finding is more interesting. If there is an adverse selection problem, either of the following cases should be true; 1) when interest rates are on the rise, people with high credits should meaningfully decrease their credit card usage while those with low credits hardly cut back on the usage,or 2) when interest rates go down, people with low credits should meaningfully increase their credit card usage while those with gooediredits hardly change the usage. However, the empirical analysis did not idely fy adverse selection issues either of the cases, burueounmore incredit balances of the low credit group meaningfully decrease when interest rates declines. Therefore, it can be construed that Korean credit card market is free from adverse selection problems concerning interest rates. Lastly, if moral hazard of credit card users exist in the market as Park (1997) claimed, defaulters should spend on credit up to or nearly the limit in the month right before they are behind on the payment when their credit default risks maximized. However, in the previous month before default, bad credit groups show little tendency to spend up their credit. Even if some used bigger portions of their credit, it is not because of increases in spending but because of decreases in credit limits. As a result, groundless are the concerns about moral hazard that card users would exercise their option when their credit default risks are at the peak. In conclusion, interest rates of the Korean credit card market are unreasonably high in that there is no substantial risk of adverse selection or moral hazard. Although the Korean economy is recovering from the global financial crisis at a fast rate, the sense of recovery fails to spread every corner of the society. On the contrary, expected income level of the lowincome class is going down. In addition, as risk tolerance in the financial markets declined due to the global financial crisis, ever-rising interest rates of non-banking institutions distress low-income households. One consolation is that the government has recently implemented policies to lower interest rates of the non-banking sector so that low-income people could take out loans at lower costs. Opponents argue that such policies distort market interest rates and even raise default risks in the long run. However, as Ko Hyuk-jin et al (2009)have already found, expanding the credit limits of poor-credit households and/or lowering their borrowing rates does not necessarily translate into higher default risks. Therefore, it is expected that lowering interest burdens of the low-income class by slashing the borrowing rates of the non-banking sector will deliver positive effect. Unfortunately, most studies on interest rates in the financial market have largely, if not only, focused on the corporate finance and the banking institutions thus far. Considering the fact that household debts have already outgrown corporate debts and how important the household finance is, it is expected that this study will serve as a good starting point for long-overdue studies on optimal interest rates in the non-banking sector.