Apple Card is moving to Chase, here's everything we know

After multiple years of speculation, last month Apple officially announced that Chase is set to become the new issuer of Apple Card. Apple says the transition from Goldman Sachs to Chase will occur in approximately 24 months. Here’s everything we know about what this transition means for Apple Card users …

Why is Goldman Sachs ditching Apple Card?

In January 2022, Goldman Sachs revealed that it had lost over $1 billion on its Apple Card partnership since 2020. At the time, however, the company claimed it was still “committed” to the partnership with Apple despite those losses.

How did Goldman lose so much money on Apple Card? First, the bank approved large number of customers with lower credit scores than its traditional clientele, which led to higher-than-anticipated default rates. According to figures cited by The Wall Street Journal, Apple Card’s subprime borrowing rate is 34%, which is higher than Chase (15%) and Capital One (31%). Apple Card’s delinquency rate is 4%, which is higher than the industry average of 3.05%. Goldman has a 2.93% net charge-off rate, double that of Chase and Bank of America.

At the same time, the Apple Card’s consumer-friendly features, such as no fees, limited Goldman’s ability to generate revenue or cut costs.

As those losses continued to mount, however, Goldman decided it wanted out of the deal with Apple. In 2023, a report said that Goldman had started talks with American Express about taking over the Apple Card partnership.

At the same time, Goldman also started to pull back entirely from the consumer finance business. It scaled back its Marcus personal finance brand and shuttered its co-branded GM credit card.

Apple reportedly talked to multiple other companies about taking over Apple Card, including American Express, Capital One, and Synchrony. Ultimately, Apple and Goldman settled on a deal with Chase.

Through this deal, Goldman Sachs is offloading the entirety of the $20 billion of outstanding Apple Card balances to Chase at a discount of $1 billion. This is highly abnormal. Generally, balances are sold at a premium of at least 8%, according to The Wall Street Journal. This signals just how important it was for Goldman Sachs to get out of this partnership.

Apple Card + Chase

Apple says that Apple Card’s transition from Goldman Sachs to Chase will occur in approximately 24 months. As of right now, Apple’s website says there is nothing that Apple Card users need to do to migrate their account to Chase.

We’re still waiting on a lot of the details about what a Chase version of the Apple Card will look like. On its website, Apple has a page where it explains the “Apple Card Issuer Transition.”

This website, however, focuses on providing information on “using Apple Card during the transition period.” Apple says that additional details “regarding the transition will be shared with all Apple Card users as the transition date approaches.”

During the transition period, here’s what Apple says:

Again, all of this is information for during the transition. It’s still unclear what Chase will change once the transition is officially finalized.

Apple Card Savings Account

One of the most popular parts of Apple Card is the Apple Card Savings Account. This is a high-yield savings account operated by Goldman Sachs exclusively for Apple Card customers.

The Wall Street Journal reports that Chase will launch a new Apple savings account as part of its Apple Card deal. Additionally, customers with an existing Apple Card Savings Account will get to “decide whether they want to stay there or open an account with JPMorgan.”

Wrap up

What do you think about Apple Card moving to Chase? Do you think it will end up being good news or bad news? Let us know down in the comments.

CardPointers helps users earn more points everywhere they shop for free. With CardPointers+, most users save $750+ per year — and for a limited time you can save 50% off the normal price. –trusted affiliate link*

Must-have MagSafe accessories for your iPhone: 

Follow Chance: Threads, Bluesky, Instagram, and Mastodon. 

...