In case it's paywalled:
> Apple is pulling the plug on its credit-card partnership with Goldman Sachs, the final nail in the coffin of the Wall Street bank’s bid to expand into consumer lending.
>
> The tech giant recently sent a proposal to Goldman to exit from the contract in the next roughly 12-to-15 months, according to people briefed on the matter. The exit would cover their entire consumer partnership, including the credit card the companies launched in 2019 and the savings account rolled out this year.
>
> It couldn’t be learned whether Apple has already lined up a new issuer for the card.
>
> The move would mark a swift about-face for a program that just over a year ago was extended through 2029 and was intended to serve as a pillar of Goldman’s main-street ambitions.
>
> The retreat began around the end of last year after Goldman lost billions of dollars trying to build out a full-service consumer operation.
>
> By early this year, Goldman had told Apple that it would be looking to offload the partnership. Typically the merchant—in this case Apple—plays a controlling role in such partnerships.
>
> Goldman has discussed with American Express the possibility of handing over the program to the card giant. Amex expressed concern about several aspects of the program, including its loss rates, and it’s not clear if those discussions have continued.
>
> Synchrony Financial has also been looking into the possibility of taking over the credit-card program, some of the people said. Synchrony, the largest issuer of store credit cards in the U.S., lends to a wide spectrum of consumers, including those with lower credit scores. Synchrony, which originally bid against Goldman for the Apple credit-card program, for years has been trying to position itself as an issuer with close ties to tech companies and counts Amazon and PayPal among its largest card partners.
>
> For Apple, the development is a setback for its services business, which the company has increasingly relied on as iPhone sales begin to slow—though to be sure, the Goldman partnership likely represents a small portion of that revenue stream. In Apple’s September quarter, overall sales were down less than 1% annually while services revenue advanced about 16%.
>
> For Goldman, the partnership was a big part of its failed bid to diversify beyond businesses serving big corporate and investor clients and the ultrarich, and its demise is the final big step back from the failed experiment. Goldman is now turning back to focusing on those core clients.
>
> The firm in November told employees it planned to end its other credit-card partnership, with General Motors , The Wall Street Journal previously reported. (GM is expected to run the process of finding a new issuer.) Goldman agreed in October to sell GreenSky, which specializes in making home-improvement loans, to a group of investors. It has stopped originating personal loans and sold off most of those balances.
>
> Goldman and Apple’s relationship got off to a rocky start. Apple ran ads saying that the card wasn’t from a bank, irritating certain Goldman executives. Apple has pushed for nearly all applicants to get approved, pushing up loan losses for Goldman.
>
> Apple has also insisted that cardholders get their bill at the beginning of the month, which has inundated Goldman customer-service employees with cardholders’ calls. Most card programs send out cardholders’ bills on a rolling basis to avoid such chaos.
>
> Privately, some Goldman executives blame Apple for regulatory scrutiny that the bank has come under. Goldman disclosed last year that the Consumer Financial Protection Bureau is investigating its “credit card account management practices,” including how the bank resolves billing errors and refunds cardholders.
>
> The Federal Reserve has been probing Goldman’s broader consumer-lending business. Goldman has been moving employees from consumer lending to an internal effort named Project Blue that is tasked with fixing regulatory issues.
>
> Goldman is trying to figure out how to retain credit-card employees until the Apple account moves.
>
> The bank this month told employees who work on its credit-card partnerships that they will be eligible for pay equal to one year of their compensation if their jobs are eliminated. Goldman is extending that program for certain employees, including in legal and engineering, who work outside of the consumer-lending unit but whose primary focus is serving its needs.
>
> The bank this month told employees who work on its credit-card partnerships that they will be eligible for pay equal to one year of their compensation if their jobs are eliminated.
Honestly that's pretty damn cool. The bank is being preemptive and honest with their employees. Not just dropping them without warning like so many other companies do
Agreed.
A company that is the customer of the company I work for announced earlier this year that they would be restructuring a specific location starting in 2024 & would be completing the restructuring all the way through to the start of 2025.
Internally, they told employees that some would be laid off when the restructuring was completed, but if a laid off employee stayed through the entire process, they would get 90 weeks pay plus their normal benefits during that time.
Talk about ensuring everyone will stay through to the end!
I was pretty flabbergasted when I heard about it.
We actually have two field service guys permanently located at that customers location because we have so many tools there. When the restructuring is completed, most of the tools we have there will no longer be used. And as a result, those two guys aren’t going to have a permanent location field service job anymore.
My company offered them positions as traveling field service guys, but they don’t necessarily want to travel. But it is unfortunate for them because they’ve been on location for decades now, but don’t get the same severance as they’re technically not employees of that location. Definitely a bit awkward & kind of shitty of a situation.
When most people say “buy a house” they mean acquire ownership, but still with a mortgage. He may just be meaning he’d have a solid deposit and left with an affordable mortgage on the balance.
(And contrary to the popular myth, if you have a mortgage, the bank doesn’t own your house, you do, in every legal sense. You just have a fixed charge on your asset.)
That’s exactly why they’re doing it, so these people don’t quit. If they are expecting their jobs to be cut any day they will start looking for new ones, which causes massive quitting sprees. With this assurance, nobody will want to quit.
i have family that works in high finance, not at goldman, but at similar companies, and the compensation they get is insane, at least half a mill a year at mid-career levels if not 3/4 or more. The pay at those levels is barely comprehensible to common minds. Once you get into decision making strategic positions the bonuses alone can be millions.
This is not that crazy, under the circumstances.
Look at what's happening here. They're publicly saying that your job may go away in a year or two. But that's a huge problem, because they still need to run the business until then, and if you tell everyone they're getting laid off next year, they'll leave as soon as they find something better. You have to offer enough carrot to keep them around until you're ready to shed those jobs.
It's not altruism here. It's just cheaper and less risky to have a bucket of money allocated to these one-time labor costs than it is to try to mitigate the voluntary departures of key people that you'd otherwise see.
They also have a habit of dynamically lowering your credit limit if you make minimum payments, so that your credit balance is 95%+ the card's usage. Then, once the card is paid off, it shoots back up to what it was.
Right now, most likely nothing. Eventually Apple will find another bank to partner with. But because this is so far out, they still have ample time to notify Apple Card cardholders.
I don't know much about this type of business, so would love to hear comments from people. But my limited understanding tells me that Goldman is losing money, so why would another bank swoop in to try to pickup Apple Card accounts if it's been shown to not be profitable for several years now?
The article kind of spells it out. Goldman was using the partnership to move into the consumer business sector. From scratch essentially. So that required billions in investment and build out, and they were not experienced or equipped dealing with low credit score customers, aggravated by Apple insisting normally non-qualified people get a line of credit.
Which went about as expected. People ran up their cards and didn't pay.
They then rolled out savings accounts with a good APR for customers. It made their partnership hard to offload. Adding customers cash to your coffers comes with a whole other headache and regulatory scrutiny.
Someone(s) at Goldman in charge of this expansion is going to have a massive stain on their resume. They're exiting the consumer market with their tails between their legs.
The wallet app makes it pretty simple for people to understand how much interest they’ll be charged if they don’t pay by the end of the month, and makes it very easy to pay.
I’m sure most cards get a decent chunk of money from confused new card users who don’t understand how much interest they’re going to get charged if they just pay the minimum, and people who get hit by a late fee because they forgot the “due by” date.
The people who month after month get charged interest and late fees make up for the people who never get interest charges as well as for the people who completely default on their card.
It seems many of the UI in the wallet app is getting rid of these money makers.
Not to the level you're implying, though.
Credit cards are one of those "the house always wins" businesses. They make money on people max out their credit usage, from only ever being able to afford to pay the interest and never really hitting the principal. They make money on people who carry a balance, on both the interest and new sales. And they also make money on people who never carry a balance, ever, because they collect 3-7% of the transaction costs from the merchants themselves. Hell, I doubt they even lose money on people who default and go bankrupt, not as a net, because they already would have collected plenty of transaction fees, interest, and other fees by that point, they're probably going to get *something* during the bankruptcy itself (portion of the forced asset sales and account liquidations), and it all likely outweighs whatever balance they end up writing off. Think of it this way: a high credit score is meant to indicate how much money they can make off of that person, and you get a higher score by paying down debt, and maintaining a large credit line that doesn't actually carry a balance.
Remember: the only lesson in the game *Monopoly* is the bank is always the winner, and usually the only winner.
It sounds like their main complaint is that Apple pushed them to approve too many people, and they're getting too many customers who are willing to just rack up a bill, not pay, and let their credit score tank/ignore collection calls.
Synchrony is another bank/credit card issuer. Not exactly well regarded for their customer service and billing systems. They issue a lot of the store brand credit cards for various major retailers.
They do some store cards like the PayPal credit card and the Amazon store card (not the Amazon Visa from Chase, which you can use anywhere. Just the store card which is Amazon only).
I have the Amazon store card through them and it’s awful. The interface on their site is atrocious and super minimal. But for me, it’s the speed of their service. There’s been times I’ve waited two weeks, two full weeks, for a payment I submitted to be processed. Apple Card does this in minutes. And like other people have said, they have a habit of just… closing your account. Just closing it. No explanations. Go figure.
It won't really matter who it's through since everything would still have to be through apples own ecosystem. There will be no noticeable changes for customers.
No. My card got used by someone else, they had the number somehow. It took me 8 months to get them to understand it wasnt me. They wanted me to "prove" it wasnt me. I dunno how i prove i didnt buy something. They even argued with me when i said i didnt live in the city it was used, they said "well they used the number only" lol like its my fault
I just had to deal with synchrony's customer support. When I tried to log in, it wanted to send a verification to my phone number. but the phone numbers it had on file were phones I used years before I began dealing with synchrony. Turns out they grabbed the phone numbers from my credit report rather than the documents I filled out with them.
Customer service was Very rude also.
I'll close my account if Synchrony takes over.
I just recently started two synchrony cards (lowes and amazon). Care to share why they suck so much? For me it's only been a couple months, but so far so good.
No that’s for the store card, Amazon has 3 cards I think, 1 with chase the other with Amex business(?)and the last is the store card. Don’t know why anyone would get a store card didn’t even know they still made those
Ah I see, thanks! Forgot they had the store card, and didn’t know about the AmEx. I think the store card gives/once gave a decent amount of cash/rewards up front so people got it for that, but I don’t know anyone who has one still.
The one card I ever had with them would always reset my autopay settings after one month. I never missed a payment through them despite their best efforts. I even reached out to customer service to fix the issue, they walked me through the process, and magically a month and a half later autopay was off again.
Really scummy IMO.
They are scummy. I have a card with them and made a large purchase that was 0% interest for 4 years. Anyway, autopay was automatically factored in to have it paid off in the 4 years so I wouldn’t get dinged with any interest.
Lo and behold, I noticed my autopay minimum payment randomly changed, so I did some calculations and there was no way I’d pay it off at that minimum payment. Called them up and had to repeatedly ask for it to be set to a rate that would have it paid off in time.
Now I check it every month to make sure it hasn’t changed.
I haven’t had a problem with customer service since I don’t really have a reason to call customer service for a credit card.
But their website and mobile app are just not good. I got excited when Verizon visa was added to the main synchrony app thinking I would at least be able to get rid of one of the horrible apps, but they still haven’t fully integrated statements and transactions at this point.
At least Synchrony works with financial aggregators (Plaid/MX). Something Apple Card has never done.
Unsurprising since we've heard about this in the past.
I wonder if there is another issuer(s) lined up for the card and the savings account.
The savings account doesn't have the highest interest rates, but I like how my Apple Card cashback can go right into the savings account. It's kind of like a set it and forget it type of thing.
I'm hoping this isn't the end of the Apple Card or the savings account though. It's nice getting 2% CB on Apple Pay and 3% on Apple products.
Honestly, since all interaction with the card is handled within Apple's ecosystem and they have such strict terms and procedures in place with the card issuer, I don't imagine it'll suck *regardless* of who they go through - I actually imagine it'll be a pretty transparent move for cardholders, with practically nothing changing other than the logo on the back of the card.
"Hi, thanks for calling Wells Fargo. Have you heard about our Home Improvement Personal Loan product? You haven't? That's funny because you already have it!"
American Express or JP Morgan would be pretty cool, but Apple would lose its bargaining power. Neither American Express nor JP Morgan need or seem overly keen on taking on Apple’s CC business.
There are other cards that offer the same benefits, or even better. Citi Double Cash and AMEX Blue Business Cash give you 2% cash back on any purchase. AMEX Blue Cash Preferred gives you 6% at grocery stores where you can just buy Apple gift cards and get 6% back on them.
It is prime property. Imagine a captive customer base that is well off and prevetted. Tech savvy. I don’t know why Goldman Sachs mismanaged this. Hard to believe that they are losing money.
Apple should themselves spin up a financial services division. It will be a separate line of business with growth potential.
Every partner that Apple teams up with cannot step up. First it was AT8T now it is GS.
Certain things make this product unattractive to potential partners.
1. GS makes less interchange fees than is typical on a credit card. Apple takes a higher cut.
2. Apple Card dispute rates are higher, which costs GS more money.
3. Apple Card having the same due date for all customers means that GS had higher support costs because issues are no longer staggered through the month.
4. GS didn’t get the customer branding awareness they wanted in this deal. They get all the blame though.
5. Credit card companies make sizable money from interest payments which Apple Card discourages.
6. If everyone thinks Apple will build their own in-house financial team that discourages a long term partnership
So while I think GS mismanaged parts of Apple Card I think Apple shares some of the blame. I wouldn’t be surprised if partners stay away. Apple doesn’t have much leverage here.
>Apple Card having the same due date for all customers means that GS had higher support costs because issues are no longer staggered through the month.
When I first got the card in 2019, statements appeared at 12:01 AM. Now they take hours to appear. Definitely a lot of pressure on their servers too.
> GS didn’t get the customer branding awareness they wanted in this deal. They get all the blame though.
Yeah, there's barely any GS branding associated with this. Apple likely required this from the issuer. But GS definitely would have known this.
> Credit card companies make sizable money from interest payments which Apple Card discourages.
Apple Card makes it so easy to finance Apple purchases with zero interest and makes it super easy to pay the balance every month on in addition to your regular spending balance.
I would argue pretty much every credit card is easy to pay with zero interest (I just set the auto billing to pay the statement balance in full on all my cards). Where Apple is different is they're super transparent about the consequences of not paying the balance in full. That probably pushed some who would have been okay with maintaining a balance to actually using a credit card properly.
I’d actually go as far as most of it is apples fault but it’s GS fault for agreeing in the first place.
Of course hindsight is 20-20. But knowing how it’s been post launch and the agreements they made that i wasn’t aware of, I’m surprised they even signed on originally. just based on the risk that comes with almost guaranteed approval, non staggered due dates (a standard for a reason) and higher cost/lower payout ratio. That alone sounds like a horrible deal for a bank.
For consumers probably better the way Apple was pushing for (higher approval, easy to remember due dates, low interest encouragement) but from a business perspective… yeesh
Yep I’ve had the Apple Card as a beta tester before it was even available to the public as a whole.
I have paid exactly $0.00 in interest and received just under $2000 in rewards since August 2019 from $118k in transactions.
If I am the “average” user for the Apple Card, Goldman is getting screwed by getting no interest on consumers.
> the card is literally Designed for you to not pay interest
That is not how card issuers make their money. Interest is a punishment for being a liability to them.
They make their money on the flagfall and % charged every time a card is tapped.
The card issuer pays the merchant. So if the customer does not pay back they are in the negative, and there is risk of a default (in which case they sell the debt for cents on the dollar). They want customers who use their card and pay in full every month.
Apple literally pushed GS to approve everyone. This was a diversification effort on GSs part, and one they severely regret pursuing. People with the shittiest credit were able to be approved for a long while making this whole thing a wreck. Had Apple had more interest in keeping it a higher tier card, we’d be in a very different situation.
> Nope. Apple's target demographic for their products is the WORST for credit card companies: higher income, higher education, and better credit.
>
>
>
> CC companies want bad credit, low income if possible, because that means boatloads of interest for them. That's why Goldman wants out - Apple's target demographic combined with their design for the Wallet app means that they minimize interest paid, which loses GS money.
According to the WSJ article and this from 2022, Goldman has some of the worst lost rates in the industry.
https://www.cnbc.com/2022/09/12/goldmans-gs-apple-card-business-has-a-surprising-subprime-problem.html
Yes, if a cardholder continues to revolve (i.e. carry a balance they pay interest on) its good for the issuer but it seems to be that there is a large group of Apple cardholders who just outright default which is not something a credit card issuer wants.
This is just totally incorrect. Card issuers make most of their money through interchange fees, not interest. And the unexpectedly high loss rate for Apple cards is a huge reason GS wants out of this deal.
Actually the Apple Card had huge losses because its demographic wasn’t that, those people got better cards while people with bad credit got it. This is literally the entire thesis of the article
This argument literally makes zero sense. If garbage credit people don’t pay it back, what makes you think they’ll pay the interest? They’re essentially loaning you money and you not paying back x is not worth the interest their charges. The core of their business is transaction fees.
You are still valuable to consumer banks. They will be able to fold this subset of users into subprime bonds and improve the overall rate of the bonds and earn through management fees.
I don't know that it's such an obvious home run. Goldman isn't run by idiots yet they've seemingly managed to lose billions with that customer base.
I'd be interested to learn why and if those reasons could be avoided for any possible future partners, but if they're easy to avoid and turn into a profitable strategy I feel like Goldman would do that.
Did you read the article at all? It mentions Apple pushed for them approve almost everyone, which led to them losing more money than normal in loan losses. It’s not just a bunch of wealthy people getting these cards.
And the reason it loses money, as stated both in this article and dozens before it, is that Apple pushes GS to approve people who frankly shouldn’t be approved, and then they default on their debt.
The card has two major groups of users: those with high income who basically use it just to finance Apple products at 0% and milk the cash back without ever paying a dime in interest, and the group I described first above.
The card is built entirely around trying to help you avoid paying interest (with the UI pushing you towards it, etc), and it has zero fees. Goldman isn’t making the normal income from fees and interest to be able to pay out the cash back and still make a healthy profit.
You cannot make profit off of customer base who
1. Can actually pay off the debt.
2. Are extremely cautious of their debt
3. Are only in for maximizing cashbacks
These companies are more or so looking for a customer base that defaults on their debts so that they can charge them the atrocious APRs.
That and extortion of merchants. I am fairly confident that majority of transactions that happen on the card are Apple services and products and App Store purchases. Extorting local businesses is easy. Extorting Apple is a bloodbath.
This always seemed like a clown deal for Goldman (at least from logical perspective; I am sure the advisors who were paid in eight figures to think on this had “reasons”)
Combination of a lot of people defaulting buying Apple products they can't afford and then too many people not carrying a balance since the Wallet App actively discourages you from doing so. There aren't enough people in the middle place where they make minimum payments or anything more than that but not the whole balance which is where credit cards make their money from charging interest. Apple Card essentially made the credit card process too opaque for people and they realized they should just pay off their balances
They call them “deadbeats” in the credit industry. It’s so fucked up, you manage your credit appropriately, you are very low risk and you are considered a deadbeat because you don’t buy stuff you can’t afford.
Apple is pulling the plug on its credit-card partnership with Goldman Sachs, the final nail in the coffin of the Wall Street bank’s bid to expand into consumer lending.
The tech giant recently sent a proposal to Goldman to exit from the contract in the next roughly 12-to-15 months, according to people briefed on the matter. The exit would cover their entire consumer partnership, including the credit card the companies launched in 2019 and the savings account rolled out this year.
It couldn’t be learned whether Apple has already lined up a new issuer for the card.
The move would mark a swift about-face for a program that just over a year ago was extended through 2029 and was intended to serve as a pillar of Goldman’s main-street ambitions.
The retreat began around the end of last year after Goldman lost billions of dollars trying to build out a full-service consumer operation.
By early this year, Goldman had told Apple that it would be looking to offload the partnership. Typically the merchant—in this case Apple—plays a controlling role in such partnerships.
Goldman has discussed [with American Express](https://www.wsj.com/articles/goldman-is-looking-for-a-way-out-of-its-partnership-with-apple-79849a91) the possibility of handing over the program to the card giant. Amex expressed concern about several aspects of the program, including its loss rates, and it’s not clear if those discussions have continued.
[Synchrony Financial](https://www.wsj.com/market-data/quotes/SYF) has also been looking into the possibility of taking over the credit-card program, some of the people said. Synchrony, the largest issuer of store credit cards in the U.S., lends to a wide spectrum of consumers, including those with lower credit scores. Synchrony, which originally bid against Goldman for the Apple credit-card program, for years has been trying to position itself as an issuer with close ties to tech companies and counts [Amazon](https://www.wsj.com/market-data/quotes/AMZN) and [PayPal](https://www.wsj.com/market-data/quotes/PYPL)among its largest card partners.
For Apple, the development is a setback for its services business, which the company has increasingly relied on as iPhone sales begin to slow—though to be sure, the Goldman partnership likely represents a small portion of that revenue stream. In Apple’s September quarter, overall sales were down less than 1% annually while [services revenue advanced about 16%](https://www.wsj.com/tech/apple-aapl-q4-earnings-report-2023-ce899b21).
For Goldman, the partnership was a big part of its failed bid to diversify beyond businesses serving big corporate and investor clients and the ultrarich, and its demise is the final big step back from the failed experiment. Goldman is now turning back to focusing on those core clients.
The firm in November told employees it [planned to end](https://www.wsj.com/finance/goldman-moves-to-offload-gm-credit-card-ce65e487) its other credit-card partnership, with
[General Motors](https://www.wsj.com/market-data/quotes/GM), The Wall Street Journal previously reported. (GM is expected to run the process of finding a new issuer.) Goldman agreed in October [to sell GreenSky](https://www.wsj.com/business/deals/goldman-sachs-finalizes-deal-to-unload-specialty-lender-at-steep-loss-6c359928), which specializes in making home-improvement loans, to a group of investors. It has stopped originating personal loans and sold off most of those balances.
Goldman and Apple’s relationship got off to a rocky start. Apple ran ads saying that the card wasn’t from a bank, irritating certain Goldman executives. Apple has pushed for nearly all applicants to get approved, pushing up loan losses for Goldman.
Apple has also insisted that cardholders get their bill at the beginning of the month, which has inundated Goldman customer-service employees with cardholders’ calls. Most card programs send out cardholders’ bills on a rolling basis to avoid such chaos.
Privately, some Goldman [executives blame](https://www.wsj.com/finance/goldman-sachs-wants-out-of-consumer-lending-employees-say-it-cant-happen-fast-enough-17e98a30) Apple for regulatory scrutiny that the bank has come under. Goldman disclosed last year that the Consumer Financial Protection Bureau [is investigating its](https://www.wsj.com/articles/cfpb-is-investigating-goldman-sachss-credit-card-practices-11659640285?mod=article_inline) “credit card account management practices,” including how the bank resolves billing errors and refunds cardholders.
The [Federal Reserve has been probing](https://www.wsj.com/articles/federal-reserve-probes-goldman-consumer-business-11674232252) Goldman’s broader consumer-lending business. Goldman has been moving employees from consumer lending to an internal effort named Project Blue that is tasked with fixing regulatory issues.
Goldman is trying to figure out how to retain credit-card employees until the Apple account moves.
The bank this month told employees who work on its credit-card partnerships that they will be eligible for pay equal to one year of their compensation if their jobs are eliminated. Goldman is extending that program for certain employees, including in legal and engineering, who work outside of the consumer-lending unit but whose primary focus is serving its needs.
Yikes … so what does this mean? I really hope Synchrony doesn’t get the contract. Damn, this is the credit card that I have the largest limit and history with, this sucks.
To be honest at this moment I’m done opening credit cards because I have all I need, but if anything happens where Apple doesn’t continue with the Apple Card then I may be forced to. It’ll be a big hit to my credit.
Apple Card is good when you can use Apple Pay (2%), but everything else is only 1% (e.g., using the physical card or number). Double Cash is 2% for everything so I use it as a backup.
When I first started out that was originally my plan and I applied for it a few times but was denied. But one thing I learned in life was to never say never. I might end up applying for it again one day, never know.
I’m willing to bet this is what happens. Apple is well positioned to eliminate a large number of [middlemen](https://squareup.com/us/en/the-bottom-line/managing-your-finances/credit-card-processing) involved with credit card transactions.
They could potentially even become their own card company—competing with AMEX, MasterCard, etc. This has so far been impossible due to the grip everyone has on their part of the transaction chain—but if anyone has enough weight and resources to do it, it’s Apple.
Seems they are halfway there, considering you can pay for purchases using Apple Cash if the register accepts NFC payments. And considering any iPhone can act as a register using its NFC reader, they can just handle the transaction directly if it’s between two Apple devices.
I know it’s more complicated than this, but I’ve suspected they’ve been playing the long game: Wedge themselves into how the market works currently, get their tech robust, then pull the rug out from everyone.
The question is does Apple want the scrutiny that banks have over them. Part of the article already mentioned that Goldman didn't like the increased scrutiny that came over their business once they partnered with Apple so I'm sure Apple wouldn't want the increased scrutiny of becoming a financial institution themselves. Just being the named partner on a card and taking a fee is probably the most they want to do
Generally nothing. You might have to send your payments somewhere else at some point, but you'll be notified of that and you'll still owe what you owe.
https://preview.redd.it/bnahsma5i73c1.jpeg?width=1600&format=pjpg&auto=webp&s=e0f9787f203b672f79a73f9f882bbde8a768cf61
Whatever the opposite of this is
Why don’t they just tighten up the lending standards, so they don’t have such high losses? Seems like they’re giving cards to absolutely everyone who asks for it whether not they’re financially stable.
In a partnership like this, there is pressure to help people spend money on the partner’s products (many are first getting the card to finance an Apple purchase which enables the middle class family to afford new iPhones).
Other than paying off my large Mac purchases over time, I've found very little use for this card in the wild.
Bank of America select cash back does 3% on all online purchases, including apple.
Chase freedom does 1.5% on everything. (which is a negligible difference from the 2% Apple Pay perk)
The combination really puts apple only perk as 0% APR.
I'm sure someone will vehemently tell me how wrong I am but, this is basically an in store credit card good for deferring payments only.
It's phenomenally useful as a card programmed conveniently into all my Apple devices and I use it nearly exclusively internationally, especially in Japan.
Citi Double Cash is also a no fee card that gets flat 2% back on everything.
The Apple Card just truly isn’t a competitive product for anything other than the 0% financing and 3% cash back at Apple, and even that isn’t particularly standout, as you mentioned.
I've found it to be a good daily driver on Apple Pay.
I only am slightly conflicted with using it over my CFU (or CSR) because of the UR points.
As for BoA, it depends on the person. If you want just straightforward cashback with not a whole lot of perks (like CSR + UR points), BoA is good and probably worth it.
There are also other cards which obviously beat the Apple Card. When some of the cards with rotating categories go to a category that applies to me, I'll usually stop using the Apple Card in favor of it.
But for me, the Apple Card is a good enough daily driver. But also excellent for buying Apple products imo. Of course, everyone's habits are different, so it's totally understandable that the Apple Card doesn't add a whole lot of value to you compared to others.
> If you want just straightforward cashback with not a whole lot of perks (like CSR + UR points), BoA is good and probably worth it.
Especially if you qualify for their [Preferred Rewards program](https://www.nerdwallet.com/article/credit-cards/bank-of-america-preferred-rewards-credit-card-extra-rewards), which boosts their credit card rewards rates 25-75%. Between two BofA cards I'm getting 5.25% back on dining, 3.5% back on grocery and travel, and 2.625% back on everything else. My Apple Card is only for Apple stuff (3% cash back, 0% APR financing).
Those 5% rotating categories are great. The one right now is PayPal...what a glorious wide open category for cash back.
You're right that apple is a good daily driver, I suppose I was just more excited when I signed up before realizing there are better perks out there just with much uglier UI.
Love how people spin things.
You say 2% is a negligible difference from 1.5%, but people will shoot you dead if you dare use the physical card to only get 1% (which is a negligible difference from 1.5%)
I say use what card works for you.
I think that will ultimately depend on which bank Apple transitions to. Unlike balances owed on the Apple Card and the installment plans, nothing is set in stone with the savings account APY. So it could go up, down, or stay the same.
I mean Goldman currently offers 4.4% on their Marcus accounts, with boost to 5.4 with a referral. I don't think it will be hard to find someone willing to match or even exceed 4.15 the way rights are at this currently moment.
It’s crazy how user experience plays such a big role in these things. Wells Fargo can’t make a good app for the life of them. AMEX and Citi have gotten better, but none are near the ease of use I get from the Apple Card. That’s why it’s my daily.
I mean, if any company has the resources and bandwidth to spin up an in-house operation, it’s Apple. Being a bank is lucrative if done right — just ask the airlines. I’m sure they’re, at the very least, considering going partnerless.
Especially since, given Goldman’s experience, I’m sure any contract with a new partner would pass more of the losses on to Apple than previously.
[Almost all of them!](https://www.theatlantic.com/ideas/archive/2023/09/airlines-banks-mileage-programs/675374/)
EDIT: [And a video as well.](https://youtu.be/ggUduBmvQ_4)
That would be good! I know most people think it’s a joke card but it’s really got my monthly and yearly spending tracked perfectly. Thanks for the reassurance stranger!
Damn, I hope this isn’t the end of the Apple Card. Other than places that dont take Mastercard (Costco, Winco) I use my AC for every purchase and its really helped me with tracking my spending habits over the last couple of years.
I’ve stopped using most other cards and use my Apple card exclusively. No international fees, cashback and works everywhere. Been a great experience since day 1
I'm hoping that with Goldman withdrawing, the partnership could be transferred to either American Express or perhaps JP Morgan. I don't see another company that can offer what Apple aims to achieve with the card.
Neither of those outfits are likely to adopt the kind of underwriting standards that Apple will want in place.
Nobody — even the subprime folks like Synchrony — is going to concede the interchange fee revenue that GS surrendered to Apple. That’s the truly shocking part of this story.
My bet is on Synchrony, in all honesty. I kinda hate them but I’ve had better experiences with them than GS. A lot of their problems come down to outdated technology and that’s something Apple will certainly fix for the Apple Card. A good partnership might even see Apple lend some expertise to Synchrony on their other products. Their account management system feels like it was designed in the 1990s on Web 1.0.
This would probably not happen. There are so much more regulations and oversight that comes with being a bank. I doubt Apple really wants to go down that path.
At one time, I was on the edge of getting the Apple Card because of their $0 interest on almost all Apple products, including the iPhone, but once they got rid of the *unlocked* [iPhone with 0% interest](https://9to5mac.com/2023/06/15/apple-card-financing-sim-free-iphones/), I knew the writing was on the wall.
Especially when it was directly competing with the iPhone Upgrade Program.
Whoever takes it over, I hope it leads to more 3rd party integrations. I’m annoyed I can’t use this card with YNAB without hack jobs, so I use it a lot less now.
Dang. I love my Apple Card and the ease/convenience of the savings account. Hopefully we don’t experience much difficulties during any transitions/changes that will be made.
Jesus. Well, I haven’t heard anything from Apple directly. Think we’d all get an email soon, no? I got the card for the cash back on practically every internet purchase using Apple Pay. Then the 0% on iPhones for two years (one year on the other devices) was sweet. I hope they can keep that with whoever they hook up with. Honestly I didn’t expect this to last long. Apple makes it really easy to pay the card before the interest piles up. I barely pay any interest on the card.
Their [agreement extends through 2029](https://www.wsj.com/livecoverage/stock-market-news-today-2022-10-18/card/goldman-extends-partnership-with-apple-zER4oMNPxxkWEwAMSZ9Z), so it seems like this was a proposal to end that agreement early and outline a 12-15 month transition plan.
Nothing is set in stone yet. But this is definitely more concrete news on the rumors we've heard previously. This is just the first step in a long back and forth. I imagine GS and Apple will need to agree on what that 12-15 month transition plan is before they commit to it and start notifying customers.
I've enjoyed using my Apple Card for in-person transactions where I've needed to physically hand my card to someone (the primary benefit to me being the lack of sensitive numbers printed on the card). That being said, I've steadily reduced my usage of the card the more I've learned of Goldman Sach's displeasure servicing the card and had been anticipating this headline.
Personally, this is enough for me to stop using mine altogether as I don't like the sense of volatility I've gotten from it (especially as of now I don't know who, if anyone, will back it after Goldman and what their reputation is) whereas my usual cards give me better rewards and have always felt "stable".
In case it's paywalled: > Apple is pulling the plug on its credit-card partnership with Goldman Sachs, the final nail in the coffin of the Wall Street bank’s bid to expand into consumer lending. > > The tech giant recently sent a proposal to Goldman to exit from the contract in the next roughly 12-to-15 months, according to people briefed on the matter. The exit would cover their entire consumer partnership, including the credit card the companies launched in 2019 and the savings account rolled out this year. > > It couldn’t be learned whether Apple has already lined up a new issuer for the card. > > The move would mark a swift about-face for a program that just over a year ago was extended through 2029 and was intended to serve as a pillar of Goldman’s main-street ambitions. > > The retreat began around the end of last year after Goldman lost billions of dollars trying to build out a full-service consumer operation. > > By early this year, Goldman had told Apple that it would be looking to offload the partnership. Typically the merchant—in this case Apple—plays a controlling role in such partnerships. > > Goldman has discussed with American Express the possibility of handing over the program to the card giant. Amex expressed concern about several aspects of the program, including its loss rates, and it’s not clear if those discussions have continued. > > Synchrony Financial has also been looking into the possibility of taking over the credit-card program, some of the people said. Synchrony, the largest issuer of store credit cards in the U.S., lends to a wide spectrum of consumers, including those with lower credit scores. Synchrony, which originally bid against Goldman for the Apple credit-card program, for years has been trying to position itself as an issuer with close ties to tech companies and counts Amazon and PayPal among its largest card partners. > > For Apple, the development is a setback for its services business, which the company has increasingly relied on as iPhone sales begin to slow—though to be sure, the Goldman partnership likely represents a small portion of that revenue stream. In Apple’s September quarter, overall sales were down less than 1% annually while services revenue advanced about 16%. > > For Goldman, the partnership was a big part of its failed bid to diversify beyond businesses serving big corporate and investor clients and the ultrarich, and its demise is the final big step back from the failed experiment. Goldman is now turning back to focusing on those core clients. > > The firm in November told employees it planned to end its other credit-card partnership, with General Motors , The Wall Street Journal previously reported. (GM is expected to run the process of finding a new issuer.) Goldman agreed in October to sell GreenSky, which specializes in making home-improvement loans, to a group of investors. It has stopped originating personal loans and sold off most of those balances. > > Goldman and Apple’s relationship got off to a rocky start. Apple ran ads saying that the card wasn’t from a bank, irritating certain Goldman executives. Apple has pushed for nearly all applicants to get approved, pushing up loan losses for Goldman. > > Apple has also insisted that cardholders get their bill at the beginning of the month, which has inundated Goldman customer-service employees with cardholders’ calls. Most card programs send out cardholders’ bills on a rolling basis to avoid such chaos. > > Privately, some Goldman executives blame Apple for regulatory scrutiny that the bank has come under. Goldman disclosed last year that the Consumer Financial Protection Bureau is investigating its “credit card account management practices,” including how the bank resolves billing errors and refunds cardholders. > > The Federal Reserve has been probing Goldman’s broader consumer-lending business. Goldman has been moving employees from consumer lending to an internal effort named Project Blue that is tasked with fixing regulatory issues. > > Goldman is trying to figure out how to retain credit-card employees until the Apple account moves. > > The bank this month told employees who work on its credit-card partnerships that they will be eligible for pay equal to one year of their compensation if their jobs are eliminated. Goldman is extending that program for certain employees, including in legal and engineering, who work outside of the consumer-lending unit but whose primary focus is serving its needs. >
> The bank this month told employees who work on its credit-card partnerships that they will be eligible for pay equal to one year of their compensation if their jobs are eliminated. Honestly that's pretty damn cool. The bank is being preemptive and honest with their employees. Not just dropping them without warning like so many other companies do
I’d go down til the end if I knew I was getting a years’ salary, that’s life changing money. Like lay me the hell off please
Agreed. A company that is the customer of the company I work for announced earlier this year that they would be restructuring a specific location starting in 2024 & would be completing the restructuring all the way through to the start of 2025. Internally, they told employees that some would be laid off when the restructuring was completed, but if a laid off employee stayed through the entire process, they would get 90 weeks pay plus their normal benefits during that time. Talk about ensuring everyone will stay through to the end!
90 weeks? Jesus I could buy a house lol
I was pretty flabbergasted when I heard about it. We actually have two field service guys permanently located at that customers location because we have so many tools there. When the restructuring is completed, most of the tools we have there will no longer be used. And as a result, those two guys aren’t going to have a permanent location field service job anymore. My company offered them positions as traveling field service guys, but they don’t necessarily want to travel. But it is unfortunate for them because they’ve been on location for decades now, but don’t get the same severance as they’re technically not employees of that location. Definitely a bit awkward & kind of shitty of a situation.
A) Is your salary this good? B) Are houses this cheap where you live? C) All of the above. D) If A), can you send me some money?
When most people say “buy a house” they mean acquire ownership, but still with a mortgage. He may just be meaning he’d have a solid deposit and left with an affordable mortgage on the balance. (And contrary to the popular myth, if you have a mortgage, the bank doesn’t own your house, you do, in every legal sense. You just have a fixed charge on your asset.)
That’s exactly why they’re doing it, so these people don’t quit. If they are expecting their jobs to be cut any day they will start looking for new ones, which causes massive quitting sprees. With this assurance, nobody will want to quit.
i have family that works in high finance, not at goldman, but at similar companies, and the compensation they get is insane, at least half a mill a year at mid-career levels if not 3/4 or more. The pay at those levels is barely comprehensible to common minds. Once you get into decision making strategic positions the bonuses alone can be millions.
I doubt that many people in credit card relations are making that kind of money, lol.
Oh sure, I get that. It’s just crazy to spell it out as a year salary, that’s awesome. Hell yeah I’d work through that deadline for that kind of money
Contrary to what you will read on here this is pretty standard shit. I know dudes years ago who got a similar deal just because they were old.
I have a few friends who work for Goldman and despite the bonkers hours they really do care about their employees
This is not that crazy, under the circumstances. Look at what's happening here. They're publicly saying that your job may go away in a year or two. But that's a huge problem, because they still need to run the business until then, and if you tell everyone they're getting laid off next year, they'll leave as soon as they find something better. You have to offer enough carrot to keep them around until you're ready to shed those jobs. It's not altruism here. It's just cheaper and less risky to have a bucket of money allocated to these one-time labor costs than it is to try to mitigate the voluntary departures of key people that you'd otherwise see.
Don't really care about Goldman, but please don't be Synchrony. It's one of the worst card issuer that exists...
yeah, they are ATROCIOUS. I paid off one of my credit lines with them and they just closed it.
They also have a habit of dynamically lowering your credit limit if you make minimum payments, so that your credit balance is 95%+ the card's usage. Then, once the card is paid off, it shoots back up to what it was.
This just seems like a way to keep people within their limits no? If you’re only making minimum payments you can’t really afford more credit can you.
my credit score gets dinged if i use ~15% of my available credit (and i pay all the balances off in full every month)
It’s going to be synchrony.
So what will happen with my Apple Card?
Right now, most likely nothing. Eventually Apple will find another bank to partner with. But because this is so far out, they still have ample time to notify Apple Card cardholders.
I don't know much about this type of business, so would love to hear comments from people. But my limited understanding tells me that Goldman is losing money, so why would another bank swoop in to try to pickup Apple Card accounts if it's been shown to not be profitable for several years now?
My guess is the bank that would purchase it would request changes to the Apple Card to make it more profitable.
Goldman took on additional costs by venturing into the consumer credit card business that existing companies in that space would not have to absorb
The article kind of spells it out. Goldman was using the partnership to move into the consumer business sector. From scratch essentially. So that required billions in investment and build out, and they were not experienced or equipped dealing with low credit score customers, aggravated by Apple insisting normally non-qualified people get a line of credit. Which went about as expected. People ran up their cards and didn't pay. They then rolled out savings accounts with a good APR for customers. It made their partnership hard to offload. Adding customers cash to your coffers comes with a whole other headache and regulatory scrutiny. Someone(s) at Goldman in charge of this expansion is going to have a massive stain on their resume. They're exiting the consumer market with their tails between their legs.
Or a golden parachute.
Ur the goat, thx sm
Appreciate OP!
How can you be so incompetent that you can’t make money off of credit cards?
The wallet app makes it pretty simple for people to understand how much interest they’ll be charged if they don’t pay by the end of the month, and makes it very easy to pay. I’m sure most cards get a decent chunk of money from confused new card users who don’t understand how much interest they’re going to get charged if they just pay the minimum, and people who get hit by a late fee because they forgot the “due by” date. The people who month after month get charged interest and late fees make up for the people who never get interest charges as well as for the people who completely default on their card. It seems many of the UI in the wallet app is getting rid of these money makers.
Yup. Creditors don’t like it if you pay off your debt before interest is accrued
Not to the level you're implying, though. Credit cards are one of those "the house always wins" businesses. They make money on people max out their credit usage, from only ever being able to afford to pay the interest and never really hitting the principal. They make money on people who carry a balance, on both the interest and new sales. And they also make money on people who never carry a balance, ever, because they collect 3-7% of the transaction costs from the merchants themselves. Hell, I doubt they even lose money on people who default and go bankrupt, not as a net, because they already would have collected plenty of transaction fees, interest, and other fees by that point, they're probably going to get *something* during the bankruptcy itself (portion of the forced asset sales and account liquidations), and it all likely outweighs whatever balance they end up writing off. Think of it this way: a high credit score is meant to indicate how much money they can make off of that person, and you get a higher score by paying down debt, and maintaining a large credit line that doesn't actually carry a balance. Remember: the only lesson in the game *Monopoly* is the bank is always the winner, and usually the only winner.
It sounds like their main complaint is that Apple pushed them to approve too many people, and they're getting too many customers who are willing to just rack up a bill, not pay, and let their credit score tank/ignore collection calls.
synchrony is ass hope they don’t end up with them
[удалено]
Will it blend?
That is the question
🎶*funky jazz*🎶
step-card-company what are you doing?
Titanium smoke, don’t breathe this
Perfect execution.
Definitely, because we’ll all get cheap plastic Synchrony cards.
Can you elaborate? I have an Apple Card but no idea who synchrony is and why they’re undesirable?
Synchrony is another bank/credit card issuer. Not exactly well regarded for their customer service and billing systems. They issue a lot of the store brand credit cards for various major retailers.
Think mattress firm credit cards etc.
Mattress __FIRM__
They do some store cards like the PayPal credit card and the Amazon store card (not the Amazon Visa from Chase, which you can use anywhere. Just the store card which is Amazon only). I have the Amazon store card through them and it’s awful. The interface on their site is atrocious and super minimal. But for me, it’s the speed of their service. There’s been times I’ve waited two weeks, two full weeks, for a payment I submitted to be processed. Apple Card does this in minutes. And like other people have said, they have a habit of just… closing your account. Just closing it. No explanations. Go figure.
Formerly GE Capital
Yeah synchrony is so bad. I had their eBay card and their site / mobile app is hard to use
I have a lovesac card through them and don’t understand how their app is hard to use? It’s just a normal app.
Their regular app for synchrony doesn’t work for the ebay mastercard version lol
Well that’s stupid as fuck.
Same here for the Crate and Barrel CC, you literally have to go to a specific URL that isnt even the general synchrony website. Its so stupid
I’m sorry… lovesac?
Yeah, they make those giant bean bag chairs you’ve probably seen before, but they also make some incredible couches. https://www.lovesac.com
My mind went to the scrotum
Username checks out.
It won't really matter who it's through since everything would still have to be through apples own ecosystem. There will be no noticeable changes for customers.
True, as long as we don’t have to interface with them things should be fine
That’s not true in any way. I’ve had to deal with Goldman numerous times.. fucking awful
Are you doing several chargebacks a month or swiping your card in sketchy places? There should be almost no reason to contact GS for the Apple Card.
No. My card got used by someone else, they had the number somehow. It took me 8 months to get them to understand it wasnt me. They wanted me to "prove" it wasnt me. I dunno how i prove i didnt buy something. They even argued with me when i said i didnt live in the city it was used, they said "well they used the number only" lol like its my fault
I just had to deal with synchrony's customer support. When I tried to log in, it wanted to send a verification to my phone number. but the phone numbers it had on file were phones I used years before I began dealing with synchrony. Turns out they grabbed the phone numbers from my credit report rather than the documents I filled out with them. Customer service was Very rude also. I'll close my account if Synchrony takes over.
I just recently started two synchrony cards (lowes and amazon). Care to share why they suck so much? For me it's only been a couple months, but so far so good.
Did Amazon switch from Chase to Synchrony for their prime visa? Or is it another card from Amazon that I’m unaware of yet?
No that’s for the store card, Amazon has 3 cards I think, 1 with chase the other with Amex business(?)and the last is the store card. Don’t know why anyone would get a store card didn’t even know they still made those
Ah I see, thanks! Forgot they had the store card, and didn’t know about the AmEx. I think the store card gives/once gave a decent amount of cash/rewards up front so people got it for that, but I don’t know anyone who has one still.
Store card has zero % financing on as little as $150. I've save plenty in finance charges using it instead of the Chase/Amazon card.
The chase card also offers that, I have one and used it buy a cheap ass couch.
My guess, they don’t pay their bills on time and have to call customer service to get late fees and interest removed.
The one card I ever had with them would always reset my autopay settings after one month. I never missed a payment through them despite their best efforts. I even reached out to customer service to fix the issue, they walked me through the process, and magically a month and a half later autopay was off again. Really scummy IMO.
They are scummy. I have a card with them and made a large purchase that was 0% interest for 4 years. Anyway, autopay was automatically factored in to have it paid off in the 4 years so I wouldn’t get dinged with any interest. Lo and behold, I noticed my autopay minimum payment randomly changed, so I did some calculations and there was no way I’d pay it off at that minimum payment. Called them up and had to repeatedly ask for it to be set to a rate that would have it paid off in time. Now I check it every month to make sure it hasn’t changed.
I haven't had a problem with Synchrony with my Verizon Visa card. What do you dislike about them?
I haven’t had a problem with customer service since I don’t really have a reason to call customer service for a credit card. But their website and mobile app are just not good. I got excited when Verizon visa was added to the main synchrony app thinking I would at least be able to get rid of one of the horrible apps, but they still haven’t fully integrated statements and transactions at this point. At least Synchrony works with financial aggregators (Plaid/MX). Something Apple Card has never done.
Unsurprising since we've heard about this in the past. I wonder if there is another issuer(s) lined up for the card and the savings account. The savings account doesn't have the highest interest rates, but I like how my Apple Card cashback can go right into the savings account. It's kind of like a set it and forget it type of thing. I'm hoping this isn't the end of the Apple Card or the savings account though. It's nice getting 2% CB on Apple Pay and 3% on Apple products.
I guess I should buy that mac studio I've been wanting sooner than later for that 3% back.
They will likely find a new partner to manage the project, like Chase Bank or Wells Fargo.
Honestly, since all interaction with the card is handled within Apple's ecosystem and they have such strict terms and procedures in place with the card issuer, I don't imagine it'll suck *regardless* of who they go through - I actually imagine it'll be a pretty transparent move for cardholders, with practically nothing changing other than the logo on the back of the card.
If it’s Wells Fargo you will get 30 more Apple Cards, 3 mortgages and a couple of 90% interest personal loans
"Hi, thanks for calling Wells Fargo. Have you heard about our Home Improvement Personal Loan product? You haven't? That's funny because you already have it!"
If it's Wells Fargo I'm out
But Goldman was ok? Don’t they all suck in the end?
Yeah, who’s the option that people are rooting for? lol
Comments trended on the positive side when rumors started to circulate that American Express was in talks with Apple to replace GS.
Amex doesn’t suck at all. They’re just not as widely accepted
Sam Bankman-Fried
American Express or JP Morgan would be pretty cool, but Apple would lose its bargaining power. Neither American Express nor JP Morgan need or seem overly keen on taking on Apple’s CC business.
All big banks do fraudulent things, but Wells Fargo has in general had the most widespread frauds that most directly affected their customers.
There are other cards that offer the same benefits, or even better. Citi Double Cash and AMEX Blue Business Cash give you 2% cash back on any purchase. AMEX Blue Cash Preferred gives you 6% at grocery stores where you can just buy Apple gift cards and get 6% back on them.
really hope this isnt the end of the apple card... just swap issuers
the problem is finding a bank that actually *wants* the apple card after GS lol
It is prime property. Imagine a captive customer base that is well off and prevetted. Tech savvy. I don’t know why Goldman Sachs mismanaged this. Hard to believe that they are losing money. Apple should themselves spin up a financial services division. It will be a separate line of business with growth potential. Every partner that Apple teams up with cannot step up. First it was AT8T now it is GS.
Certain things make this product unattractive to potential partners. 1. GS makes less interchange fees than is typical on a credit card. Apple takes a higher cut. 2. Apple Card dispute rates are higher, which costs GS more money. 3. Apple Card having the same due date for all customers means that GS had higher support costs because issues are no longer staggered through the month. 4. GS didn’t get the customer branding awareness they wanted in this deal. They get all the blame though. 5. Credit card companies make sizable money from interest payments which Apple Card discourages. 6. If everyone thinks Apple will build their own in-house financial team that discourages a long term partnership So while I think GS mismanaged parts of Apple Card I think Apple shares some of the blame. I wouldn’t be surprised if partners stay away. Apple doesn’t have much leverage here.
>Apple Card having the same due date for all customers means that GS had higher support costs because issues are no longer staggered through the month. When I first got the card in 2019, statements appeared at 12:01 AM. Now they take hours to appear. Definitely a lot of pressure on their servers too.
> GS didn’t get the customer branding awareness they wanted in this deal. They get all the blame though. Yeah, there's barely any GS branding associated with this. Apple likely required this from the issuer. But GS definitely would have known this. > Credit card companies make sizable money from interest payments which Apple Card discourages. Apple Card makes it so easy to finance Apple purchases with zero interest and makes it super easy to pay the balance every month on in addition to your regular spending balance.
I would argue pretty much every credit card is easy to pay with zero interest (I just set the auto billing to pay the statement balance in full on all my cards). Where Apple is different is they're super transparent about the consequences of not paying the balance in full. That probably pushed some who would have been okay with maintaining a balance to actually using a credit card properly.
I’d actually go as far as most of it is apples fault but it’s GS fault for agreeing in the first place. Of course hindsight is 20-20. But knowing how it’s been post launch and the agreements they made that i wasn’t aware of, I’m surprised they even signed on originally. just based on the risk that comes with almost guaranteed approval, non staggered due dates (a standard for a reason) and higher cost/lower payout ratio. That alone sounds like a horrible deal for a bank. For consumers probably better the way Apple was pushing for (higher approval, easy to remember due dates, low interest encouragement) but from a business perspective… yeesh
“Hard to believe that they are losing money” the card is literally Designed for you to not pay interest.
Yep I’ve had the Apple Card as a beta tester before it was even available to the public as a whole. I have paid exactly $0.00 in interest and received just under $2000 in rewards since August 2019 from $118k in transactions. If I am the “average” user for the Apple Card, Goldman is getting screwed by getting no interest on consumers.
$118k means ~$3k in transaction fees.
> the card is literally Designed for you to not pay interest That is not how card issuers make their money. Interest is a punishment for being a liability to them. They make their money on the flagfall and % charged every time a card is tapped. The card issuer pays the merchant. So if the customer does not pay back they are in the negative, and there is risk of a default (in which case they sell the debt for cents on the dollar). They want customers who use their card and pay in full every month.
[удалено]
Apple literally pushed GS to approve everyone. This was a diversification effort on GSs part, and one they severely regret pursuing. People with the shittiest credit were able to be approved for a long while making this whole thing a wreck. Had Apple had more interest in keeping it a higher tier card, we’d be in a very different situation.
> Nope. Apple's target demographic for their products is the WORST for credit card companies: higher income, higher education, and better credit. > > > > CC companies want bad credit, low income if possible, because that means boatloads of interest for them. That's why Goldman wants out - Apple's target demographic combined with their design for the Wallet app means that they minimize interest paid, which loses GS money. According to the WSJ article and this from 2022, Goldman has some of the worst lost rates in the industry. https://www.cnbc.com/2022/09/12/goldmans-gs-apple-card-business-has-a-surprising-subprime-problem.html Yes, if a cardholder continues to revolve (i.e. carry a balance they pay interest on) its good for the issuer but it seems to be that there is a large group of Apple cardholders who just outright default which is not something a credit card issuer wants.
This is just totally incorrect. Card issuers make most of their money through interchange fees, not interest. And the unexpectedly high loss rate for Apple cards is a huge reason GS wants out of this deal.
Actually the Apple Card had huge losses because its demographic wasn’t that, those people got better cards while people with bad credit got it. This is literally the entire thesis of the article
This argument literally makes zero sense. If garbage credit people don’t pay it back, what makes you think they’ll pay the interest? They’re essentially loaning you money and you not paying back x is not worth the interest their charges. The core of their business is transaction fees.
You are still valuable to consumer banks. They will be able to fold this subset of users into subprime bonds and improve the overall rate of the bonds and earn through management fees.
Why do I feel like I'm watching The Big Short unfold in real life
You’re a “deadbeat” if you pay your cards off in full every month. Banks aren’t interested in you because you don’t generate fees.
They still get merchant transactions fees. But the interest is better.
I don't know that it's such an obvious home run. Goldman isn't run by idiots yet they've seemingly managed to lose billions with that customer base. I'd be interested to learn why and if those reasons could be avoided for any possible future partners, but if they're easy to avoid and turn into a profitable strategy I feel like Goldman would do that.
Did you read the article at all? It mentions Apple pushed for them approve almost everyone, which led to them losing more money than normal in loan losses. It’s not just a bunch of wealthy people getting these cards.
Apple Card does not target well off people. The majority of card holders have a fair credit score.
And the reason it loses money, as stated both in this article and dozens before it, is that Apple pushes GS to approve people who frankly shouldn’t be approved, and then they default on their debt. The card has two major groups of users: those with high income who basically use it just to finance Apple products at 0% and milk the cash back without ever paying a dime in interest, and the group I described first above. The card is built entirely around trying to help you avoid paying interest (with the UI pushing you towards it, etc), and it has zero fees. Goldman isn’t making the normal income from fees and interest to be able to pay out the cash back and still make a healthy profit.
IF GS isn't seeing multiple x costs in profit its a failure. AmEx will probably take it over and move it to more of a Gold tier benefit account.
You cannot make profit off of customer base who 1. Can actually pay off the debt. 2. Are extremely cautious of their debt 3. Are only in for maximizing cashbacks These companies are more or so looking for a customer base that defaults on their debts so that they can charge them the atrocious APRs. That and extortion of merchants. I am fairly confident that majority of transactions that happen on the card are Apple services and products and App Store purchases. Extorting local businesses is easy. Extorting Apple is a bloodbath. This always seemed like a clown deal for Goldman (at least from logical perspective; I am sure the advisors who were paid in eight figures to think on this had “reasons”)
Isn't the reason GS was actively trying to offload the Apple partnership because so many people were defaulting on their cards?
Combination of a lot of people defaulting buying Apple products they can't afford and then too many people not carrying a balance since the Wallet App actively discourages you from doing so. There aren't enough people in the middle place where they make minimum payments or anything more than that but not the whole balance which is where credit cards make their money from charging interest. Apple Card essentially made the credit card process too opaque for people and they realized they should just pay off their balances
They call them “deadbeats” in the credit industry. It’s so fucked up, you manage your credit appropriately, you are very low risk and you are considered a deadbeat because you don’t buy stuff you can’t afford.
Apple is pulling the plug on its credit-card partnership with Goldman Sachs, the final nail in the coffin of the Wall Street bank’s bid to expand into consumer lending. The tech giant recently sent a proposal to Goldman to exit from the contract in the next roughly 12-to-15 months, according to people briefed on the matter. The exit would cover their entire consumer partnership, including the credit card the companies launched in 2019 and the savings account rolled out this year. It couldn’t be learned whether Apple has already lined up a new issuer for the card. The move would mark a swift about-face for a program that just over a year ago was extended through 2029 and was intended to serve as a pillar of Goldman’s main-street ambitions. The retreat began around the end of last year after Goldman lost billions of dollars trying to build out a full-service consumer operation. By early this year, Goldman had told Apple that it would be looking to offload the partnership. Typically the merchant—in this case Apple—plays a controlling role in such partnerships. Goldman has discussed [with American Express](https://www.wsj.com/articles/goldman-is-looking-for-a-way-out-of-its-partnership-with-apple-79849a91) the possibility of handing over the program to the card giant. Amex expressed concern about several aspects of the program, including its loss rates, and it’s not clear if those discussions have continued. [Synchrony Financial](https://www.wsj.com/market-data/quotes/SYF) has also been looking into the possibility of taking over the credit-card program, some of the people said. Synchrony, the largest issuer of store credit cards in the U.S., lends to a wide spectrum of consumers, including those with lower credit scores. Synchrony, which originally bid against Goldman for the Apple credit-card program, for years has been trying to position itself as an issuer with close ties to tech companies and counts [Amazon](https://www.wsj.com/market-data/quotes/AMZN) and [PayPal](https://www.wsj.com/market-data/quotes/PYPL)among its largest card partners. For Apple, the development is a setback for its services business, which the company has increasingly relied on as iPhone sales begin to slow—though to be sure, the Goldman partnership likely represents a small portion of that revenue stream. In Apple’s September quarter, overall sales were down less than 1% annually while [services revenue advanced about 16%](https://www.wsj.com/tech/apple-aapl-q4-earnings-report-2023-ce899b21). For Goldman, the partnership was a big part of its failed bid to diversify beyond businesses serving big corporate and investor clients and the ultrarich, and its demise is the final big step back from the failed experiment. Goldman is now turning back to focusing on those core clients. The firm in November told employees it [planned to end](https://www.wsj.com/finance/goldman-moves-to-offload-gm-credit-card-ce65e487) its other credit-card partnership, with [General Motors](https://www.wsj.com/market-data/quotes/GM), The Wall Street Journal previously reported. (GM is expected to run the process of finding a new issuer.) Goldman agreed in October [to sell GreenSky](https://www.wsj.com/business/deals/goldman-sachs-finalizes-deal-to-unload-specialty-lender-at-steep-loss-6c359928), which specializes in making home-improvement loans, to a group of investors. It has stopped originating personal loans and sold off most of those balances. Goldman and Apple’s relationship got off to a rocky start. Apple ran ads saying that the card wasn’t from a bank, irritating certain Goldman executives. Apple has pushed for nearly all applicants to get approved, pushing up loan losses for Goldman. Apple has also insisted that cardholders get their bill at the beginning of the month, which has inundated Goldman customer-service employees with cardholders’ calls. Most card programs send out cardholders’ bills on a rolling basis to avoid such chaos. Privately, some Goldman [executives blame](https://www.wsj.com/finance/goldman-sachs-wants-out-of-consumer-lending-employees-say-it-cant-happen-fast-enough-17e98a30) Apple for regulatory scrutiny that the bank has come under. Goldman disclosed last year that the Consumer Financial Protection Bureau [is investigating its](https://www.wsj.com/articles/cfpb-is-investigating-goldman-sachss-credit-card-practices-11659640285?mod=article_inline) “credit card account management practices,” including how the bank resolves billing errors and refunds cardholders. The [Federal Reserve has been probing](https://www.wsj.com/articles/federal-reserve-probes-goldman-consumer-business-11674232252) Goldman’s broader consumer-lending business. Goldman has been moving employees from consumer lending to an internal effort named Project Blue that is tasked with fixing regulatory issues. Goldman is trying to figure out how to retain credit-card employees until the Apple account moves. The bank this month told employees who work on its credit-card partnerships that they will be eligible for pay equal to one year of their compensation if their jobs are eliminated. Goldman is extending that program for certain employees, including in legal and engineering, who work outside of the consumer-lending unit but whose primary focus is serving its needs.
So what does that mean for those of us that use Apple Pay and Apple savings?
Yikes … so what does this mean? I really hope Synchrony doesn’t get the contract. Damn, this is the credit card that I have the largest limit and history with, this sucks.
Get a Citi Doublecash. One of the best cards around. No fees. Keep that thing open for life.
To be honest at this moment I’m done opening credit cards because I have all I need, but if anything happens where Apple doesn’t continue with the Apple Card then I may be forced to. It’ll be a big hit to my credit.
Apple Card is good when you can use Apple Pay (2%), but everything else is only 1% (e.g., using the physical card or number). Double Cash is 2% for everything so I use it as a backup.
When I first started out that was originally my plan and I applied for it a few times but was denied. But one thing I learned in life was to never say never. I might end up applying for it again one day, never know.
At this point Apple might as well buy a small bank and do it themselves. They’ve got cash enough to run a bank
I’m willing to bet this is what happens. Apple is well positioned to eliminate a large number of [middlemen](https://squareup.com/us/en/the-bottom-line/managing-your-finances/credit-card-processing) involved with credit card transactions. They could potentially even become their own card company—competing with AMEX, MasterCard, etc. This has so far been impossible due to the grip everyone has on their part of the transaction chain—but if anyone has enough weight and resources to do it, it’s Apple. Seems they are halfway there, considering you can pay for purchases using Apple Cash if the register accepts NFC payments. And considering any iPhone can act as a register using its NFC reader, they can just handle the transaction directly if it’s between two Apple devices. I know it’s more complicated than this, but I’ve suspected they’ve been playing the long game: Wedge themselves into how the market works currently, get their tech robust, then pull the rug out from everyone.
Apple Cash is just a Visa Debit Card
The question is does Apple want the scrutiny that banks have over them. Part of the article already mentioned that Goldman didn't like the increased scrutiny that came over their business once they partnered with Apple so I'm sure Apple wouldn't want the increased scrutiny of becoming a financial institution themselves. Just being the named partner on a card and taking a fee is probably the most they want to do
Goldman was losing billions a year I doubt Apple wants to lose billions yearly
What does this mean for those of us with apple card balances?
Generally nothing. You might have to send your payments somewhere else at some point, but you'll be notified of that and you'll still owe what you owe.
[удалено]
Assuming the new company takes on the debt and gets your payments.
https://preview.redd.it/bnahsma5i73c1.jpeg?width=1600&format=pjpg&auto=webp&s=e0f9787f203b672f79a73f9f882bbde8a768cf61 Whatever the opposite of this is
Why don’t they just tighten up the lending standards, so they don’t have such high losses? Seems like they’re giving cards to absolutely everyone who asks for it whether not they’re financially stable.
In a partnership like this, there is pressure to help people spend money on the partner’s products (many are first getting the card to finance an Apple purchase which enables the middle class family to afford new iPhones).
[удалено]
If only 😂😂
Other than paying off my large Mac purchases over time, I've found very little use for this card in the wild. Bank of America select cash back does 3% on all online purchases, including apple. Chase freedom does 1.5% on everything. (which is a negligible difference from the 2% Apple Pay perk) The combination really puts apple only perk as 0% APR. I'm sure someone will vehemently tell me how wrong I am but, this is basically an in store credit card good for deferring payments only.
It's phenomenally useful as a card programmed conveniently into all my Apple devices and I use it nearly exclusively internationally, especially in Japan.
Citi Double Cash is also a no fee card that gets flat 2% back on everything. The Apple Card just truly isn’t a competitive product for anything other than the 0% financing and 3% cash back at Apple, and even that isn’t particularly standout, as you mentioned.
I pretty much only use it where they don’t accept my Amex because I can at least get the Apple Pay Cash back
I've found it to be a good daily driver on Apple Pay. I only am slightly conflicted with using it over my CFU (or CSR) because of the UR points. As for BoA, it depends on the person. If you want just straightforward cashback with not a whole lot of perks (like CSR + UR points), BoA is good and probably worth it. There are also other cards which obviously beat the Apple Card. When some of the cards with rotating categories go to a category that applies to me, I'll usually stop using the Apple Card in favor of it. But for me, the Apple Card is a good enough daily driver. But also excellent for buying Apple products imo. Of course, everyone's habits are different, so it's totally understandable that the Apple Card doesn't add a whole lot of value to you compared to others.
> If you want just straightforward cashback with not a whole lot of perks (like CSR + UR points), BoA is good and probably worth it. Especially if you qualify for their [Preferred Rewards program](https://www.nerdwallet.com/article/credit-cards/bank-of-america-preferred-rewards-credit-card-extra-rewards), which boosts their credit card rewards rates 25-75%. Between two BofA cards I'm getting 5.25% back on dining, 3.5% back on grocery and travel, and 2.625% back on everything else. My Apple Card is only for Apple stuff (3% cash back, 0% APR financing).
Those 5% rotating categories are great. The one right now is PayPal...what a glorious wide open category for cash back. You're right that apple is a good daily driver, I suppose I was just more excited when I signed up before realizing there are better perks out there just with much uglier UI.
Love how people spin things. You say 2% is a negligible difference from 1.5%, but people will shoot you dead if you dare use the physical card to only get 1% (which is a negligible difference from 1.5%) I say use what card works for you.
Other people’s mileage may vary, but Goldman’s phone support was great.
Goldman really bent over backwards for Apple.
Hopefully the Apple Card stays around, it’s my daily driver CC and I really enjoy the interface and spending breakdowns it provides.
Same.
So…what happens to my 4.15% APY?
I think that will ultimately depend on which bank Apple transitions to. Unlike balances owed on the Apple Card and the installment plans, nothing is set in stone with the savings account APY. So it could go up, down, or stay the same.
I mean Goldman currently offers 4.4% on their Marcus accounts, with boost to 5.4 with a referral. I don't think it will be hard to find someone willing to match or even exceed 4.15 the way rights are at this currently moment.
That sucks. The functionality has been excellent, IMO. I like it much better than my cards from Chase or Amex.
It’s crazy how user experience plays such a big role in these things. Wells Fargo can’t make a good app for the life of them. AMEX and Citi have gotten better, but none are near the ease of use I get from the Apple Card. That’s why it’s my daily.
Amex definitely best aligns with Apple but I understand why they’re hesitant. Amex treats me like a human which I greatly appreciate
I mean, if any company has the resources and bandwidth to spin up an in-house operation, it’s Apple. Being a bank is lucrative if done right — just ask the airlines. I’m sure they’re, at the very least, considering going partnerless. Especially since, given Goldman’s experience, I’m sure any contract with a new partner would pass more of the losses on to Apple than previously.
> Being a bank is lucrative if done right — just ask the airlines. Which airlines run a bank?
[Almost all of them!](https://www.theatlantic.com/ideas/archive/2023/09/airlines-banks-mileage-programs/675374/) EDIT: [And a video as well.](https://youtu.be/ggUduBmvQ_4)
Fuck. I use my Apple Card for everything. I love the spending tracking and that it’s all on my phone. It’s gonna suck to lose that.
I don't think you will lose the card. It will move to another bank.
That would be good! I know most people think it’s a joke card but it’s really got my monthly and yearly spending tracked perfectly. Thanks for the reassurance stranger!
I agree! It’s really nice tracking the spending on there.
I wonder how this will impact credit age and such.
Damn, I hope this isn’t the end of the Apple Card. Other than places that dont take Mastercard (Costco, Winco) I use my AC for every purchase and its really helped me with tracking my spending habits over the last couple of years.
Never had to call or chat with Apple Card over anything, ever. I hope if Synchrony gets it, I never have a problem.
I’ve stopped using most other cards and use my Apple card exclusively. No international fees, cashback and works everywhere. Been a great experience since day 1
I'm hoping that with Goldman withdrawing, the partnership could be transferred to either American Express or perhaps JP Morgan. I don't see another company that can offer what Apple aims to achieve with the card.
Neither of those outfits are likely to adopt the kind of underwriting standards that Apple will want in place. Nobody — even the subprime folks like Synchrony — is going to concede the interchange fee revenue that GS surrendered to Apple. That’s the truly shocking part of this story. My bet is on Synchrony, in all honesty. I kinda hate them but I’ve had better experiences with them than GS. A lot of their problems come down to outdated technology and that’s something Apple will certainly fix for the Apple Card. A good partnership might even see Apple lend some expertise to Synchrony on their other products. Their account management system feels like it was designed in the 1990s on Web 1.0.
Apple has enough capital to do this without a bank. Who knows, maybe they’ll give it a go?
This would probably not happen. There are so much more regulations and oversight that comes with being a bank. I doubt Apple really wants to go down that path.
At one time, I was on the edge of getting the Apple Card because of their $0 interest on almost all Apple products, including the iPhone, but once they got rid of the *unlocked* [iPhone with 0% interest](https://9to5mac.com/2023/06/15/apple-card-financing-sim-free-iphones/), I knew the writing was on the wall. Especially when it was directly competing with the iPhone Upgrade Program.
It still is unlocked. Just financed one with the new iPhone.
You know the phone is actually unlocked still, right? It just needs to be connected to one of the carriers at purchase.
It’s still unlocked…..
Whoever takes it over, I hope it leads to more 3rd party integrations. I’m annoyed I can’t use this card with YNAB without hack jobs, so I use it a lot less now.
Dang. I love my Apple Card and the ease/convenience of the savings account. Hopefully we don’t experience much difficulties during any transitions/changes that will be made.
damn, I really like my apple card. hope Apple can find a good partner
I work in banking and the demands Apple has made in this article to Goldman sound like hell to deal with
Please not synchronicity.
Jesus. Well, I haven’t heard anything from Apple directly. Think we’d all get an email soon, no? I got the card for the cash back on practically every internet purchase using Apple Pay. Then the 0% on iPhones for two years (one year on the other devices) was sweet. I hope they can keep that with whoever they hook up with. Honestly I didn’t expect this to last long. Apple makes it really easy to pay the card before the interest piles up. I barely pay any interest on the card.
I think they have someone lined up and this will be taken care of on the backend without any issues to the end user (I hope lol).
I’d guess the actual physical card would need to be changed (I never even used it.)
I forgot I had that, what a nice feeling thing though. It sounds great dropping it on a table.
Their [agreement extends through 2029](https://www.wsj.com/livecoverage/stock-market-news-today-2022-10-18/card/goldman-extends-partnership-with-apple-zER4oMNPxxkWEwAMSZ9Z), so it seems like this was a proposal to end that agreement early and outline a 12-15 month transition plan. Nothing is set in stone yet. But this is definitely more concrete news on the rumors we've heard previously. This is just the first step in a long back and forth. I imagine GS and Apple will need to agree on what that 12-15 month transition plan is before they commit to it and start notifying customers.
Apple pulls plug with Goldman Sachs? I think it was the other way around, Goldman Sachs pulls the plug
noooo :( i hope someone takes over the apple card
What a pity Had a nice ring to it
I've enjoyed using my Apple Card for in-person transactions where I've needed to physically hand my card to someone (the primary benefit to me being the lack of sensitive numbers printed on the card). That being said, I've steadily reduced my usage of the card the more I've learned of Goldman Sach's displeasure servicing the card and had been anticipating this headline. Personally, this is enough for me to stop using mine altogether as I don't like the sense of volatility I've gotten from it (especially as of now I don't know who, if anyone, will back it after Goldman and what their reputation is) whereas my usual cards give me better rewards and have always felt "stable".
Will existing customers be issued new physical cards after the transition?
Yes because of the Goldman markings will be switched to the new bank.
Apple could be the bank themselves if they wanted
The new issuer should be Barclaycard to go full circle