Will a soured Goldman Sachs-Apple deal leave bad taste for Apple Card users?

If Tim Cook can't get an Apple Card, what does that say about the problems between Goldman Sachs and Apple? Here's what you should know if you have an Apple Card or are considering applying.
Written by Maria Diaz, Staff Writer
Apple Card and iPhone
Maria Diaz/ZDNET

Have you ever struggled to dispute an issue with your Apple Card? You're not alone. Navigating Apple Card disputes through Goldman Sachs has proven to be notoriously difficult. Add this customer dissatisfaction to Goldman Sachs' subprime problem and the bank's crumbling relationship with Apple, and Apple Card users have reason to be concerned. 

Goldman Sachs, which partnered with Apple to create the Apple Card, Apple Savings account, and Apple Pay Later, appears to be reconsidering its partnership with Apple. According to The Information, Goldman Sachs is shifting its focus away from consumer banking and has expressed a desire to transfer the Apple Card partnership to American Express. 

Also: Apple's no-fee savings account reportedly nets $1 billion in deposits in a week

For current Apple Card users, the dissolution of the Goldman Sachs partnership could result in losing some of the card's benefits if Apple is forced to renegotiate terms with a new partner. Conversely, this could be a good time for new customers to apply for an Apple Card -- before the potential loss of benefits.

Goldman Sachs' alleged dissatisfaction aside, early separation seems an unlikely prospect, and American Express seems an unlikely candidate. Per the contract, the Apple Card must remain on the MasterCard network until 2026, while American Express runs on a proprietary network independent of Visa and MasterCard. 

The fact that American Express is less widely accepted than Visa and MasterCard could add another layer of inconvenience for Apple Card customers. 

Also: How to add your driver's license to the Apple Wallet app (and why you should) 

If Apple agreed to dissolve its partnership with Goldman Sachs, it would have to find a new partner willing to comply with its high demands for the Apple Card -- demands that led to the current situation.  

Goldman Sachs doesn't collect annual, late, or foreign transaction fees because the Apple Card doesn't charge its customers these fees. But Goldman Sachs also doesn't collect standard credit card fees in its Apple partnership as it doesn't get a portion of what merchants pay Apple to accept the Apple Card. This was done largely because Goldman Sachs was new to consumer banking and motivated to close a deal with a high-profile partner like Apple. 

Indeed, the Apple Card has been an unprofitable deal for Goldman Sachs, which announced in 2022 that it had lost over $1 billion on the partnership since 2020. Goldman's Apple Card business has a subprime problem, too. The bank's loss rate on credit card loans is the worst among big US card issuers. Over a quarter of the Goldman Sachs credit card loans have gone to customers with a FICO score below 660.

Also: How to use Apple Pay in stores and online

Anecdotally, The Information relayed how Apple CEO, Tim Cook, was rejected for an Apple Card when he was testing the service. The bank says this happened because he's a high-profile figure often impersonated, and flags on his credit bureau accounts were problematic.

The average customer has faced problems with Goldman Sachs. The bank has struggled to handle customer service issues, even reaching the point of being investigated by the US Consumer Financial Protection Bureau over its handling of refund requests, billing error resolutions, and more. 

Since 2019, Goldman Sachs has partnered with Apple to offer the Apple Card, a credit card designed for smooth integration with Apple Pay on Apple devices like the iPhone, Apple Watch, iPad, and Mac. By early 2022, there were over 6.7 million Apple cardholders in the US.

The Apple Card lets users finance Apple devices, like iPhones and iPads, over 24 months with 0% interest and offers up to 3% cashback on purchases. At the same time, Goldman Sachs is the financing institution responsible for managing the loans. Once the COVID-19 pandemic forced many out of a job, Goldman Sachs let Apple Card customers defer interest payments through late 2020. 

Apple has made no official statements about dissolving its partnership with Goldman Sachs, and it is not yet clear if Apple will partner with another bank to take over its financial services. 

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