Goldman Sachs extends $10B in Apple Card credit over first month

AppleInsider

According to regulatory filings made public this week, Apple Card financial partner Goldman Sachs said it doled out about $10 billion in credit lines for the Apple branded credit card in a little over one month.

The $10 billion figure is current as of the the third quarter, which ended on Sept. 30, just over a month after Apple Card launched launched on Aug. 20, reports Bloomberg.

Considering the fast pace at which Goldman is issuing credit for Apple Card, the present tally is likely much higher.

Apple Card's customer base carried a collective $736 million in loan balances at the end of the reporting period. As noted in today's report, calculating a card's success on loan figures is a difficult task, as competing issuers rarely break out performance on a per-card basis. That said, Goldman in October declared Apple Card to be the "most successful credit card launch ever."

"Since August, we've been pleased to see a high level of consumer demand for the product," David Solomon, CEO of Goldman Sachs, said of Apple Card at the time.

Apple CEO Tim Cook echoed Solomon's plaudits in an earnings conference call on Wednesday, but added a caveat, saying the launch was the most successful in U.S. history.

Significant capital layouts went into the development and debut of Apple Card, which marks not only the first card for Apple, but also Goldman's Marcus consumer banking division. Analysts in August estimated the bank is spending some $350 to acquire each Apple Card user.

Prior to launch, Goldman CFO Stephen Scherr said the company was intentionally slowing growth of unsecured personal loans under the Marcus brand to protect against exposure from Apple Card. The bank earmarked reserves representing 2.7% of existing credit card loans as it feels out customer behavior, the report said.

Apple continues to push Apple Card with ads that present users the option to gain 3% "Daily Cash" when paying for Apple products and services in its stores and online. Other benefits include a lack of fees, impressive security features and deep integration with the Apple Pay and the iOS Wallet app.

rob53

Difficult to understand loan balances when the card doesn't really have a pay date. I end up using it like a combination credit and debit card, paying off chunks of purchases a few times a month. Not sure if my balance would show in this case. 

Is $10B of credit lines a lot or a normal amount?

bluefire1

So the Apple Card is a credit card and Apple Cash is a Venmo competitor. For me, I love the Apple Card but will stick with Venmo for sending/receiving money.

emoeller

I'm assuming the $10B figure is the value of all of the cards limits times the total number of cards issued   Since the card limit varies by individual and the number of cards is not provided, the number is pretty meaningless in terms of card success.

Just for grins I looked up AMEX (2018) and they had a worldwide total number of cars outstanding of 114M with total spending of $1,184B (that's over $1 Trillion dollars), so while this is a good start for Goldman/Apple it is only a start.

Soli

bluefire1 said:

So the Apple Card is a credit card and Apple Cash is a Venmo competitor. For me, I love the Apple Card but will stick with Venmo for sending/receiving money.

Besides sending cash to Android users what benefit is there besides lower security and more risks? Do they still charge you 1% for cashing out of your Venmo account? Do they charge more than 1% for an instant wire transfer? How long does an ACH take (I find that Apple is getting them done within hours)? Is Venmo FDIC insured like Apple Pay?

Soli

emoeller said:

I'm assuming the $10B figure is the value of all of the cards limits times the total number of cards issued   Since the card limit varies by individual and the number of cards is not provided, the number is pretty meaningless in terms of card success.

Just for grins I looked up AMEX (2018) and they had a worldwide total number of cars outstanding of 114M with total spending of $1,184B (that's over $1 Trillion dollars), so while this is a good start for Goldman/Apple it is only a start.

What did you expect after one month? What has any credit card—not just issuer—gained a single month of being on the market? I'm guessing that the GS Apple Card is the most popular and fastest growing card out of the gate.

aaarrrgggh

So, likely around a million cards/accounts. Not bad...

apple ][

I'm just pulling this out of my butt, so basically, I'm doing the same things that analysts do when they speculate about Apple, but if we figure out an average of about a $5,000 limit per user, then that would come out to about a couple of million users so far (10 bill / 5000). Not bad for a card that's brand new.

lkrupp

rob53 said:

Difficult to understand loan balances when the card doesn't really have a pay date. I end up using it like a combination credit and debit card, paying off chunks of purchases a few times a month. Not sure if my balance would show in this case. 

Is $10B of credit lines a lot or a normal amount?

Gotta get that negative spin in. Just can’t accept the fact that the Apple Card is off to a good start so come up with some FUD.

wood1208

I don't see promo offered as part of signing up for Apple Card like many other banks card/s do. So, not sure what the statement "some $350 to acquire each Apple Card user" mean ?

rob53

lkrupp said:

rob53 said:

Difficult to understand loan balances when the card doesn't really have a pay date. I end up using it like a combination credit and debit card, paying off chunks of purchases a few times a month. Not sure if my balance would show in this case. 

Is $10B of credit lines a lot or a normal amount?

Gotta get that negative spin in. Just can’t accept the fact that the Apple Card is off to a good start so come up with some FUD.

There's no negative spin except from you. I'm asking a serious question, is $10B of credit lines a lot or normal. Nothing I said was negative. I use my Apple Card all the time.

Soli

wood1208 said:

I don't see promo offered as part of signing up for Apple Card like many other banks card/s do. So, not sure what the statement "some $350 to acquire each Apple Card user" mean ?

I assume that it was GS building this out for the very first time which meant that all infrastructure for it divided by an assumed number of clients over a specific time frame. Kind of like when the R&D to make a single widget costs millions, but ultimately results in a near zero cost per unit and hopefully a profit if the R&D is successful.

Soli

rob53 said:

lkrupp said:

rob53 said:

Difficult to understand loan balances when the card doesn't really have a pay date. I end up using it like a combination credit and debit card, paying off chunks of purchases a few times a month. Not sure if my balance would show in this case. 

Is $10B of credit lines a lot or a normal amount?

Gotta get that negative spin in. Just can’t accept the fact that the Apple Card is off to a good start so come up with some FUD.

There's no negative spin except from you. I'm asking a serious question, is $10B of credit lines a lot or normal. Nothing I said was negative. I use my Apple Card all the time.

That depends on many metrics which we don't have access to. The easy ones are that it's low for established financial institutions that have a history of issuing credit, but it's likely very high for a single card after one month. You could all do comparisons based on credit limits compared to FICO scores, interest rates, economic brackets, age, sex, location types, preferred device type(s), and countless other measures if we had access to the data.

sandman619

apple ][ said:

I'm just pulling this out of my butt, so basically, I'm doing the same things that analysts do when they speculate about Apple, but if we figure out an average of about a $5,000 limit per user, then that would come out to about a couple of million users so far (10 bill / 5000). Not bad for a card that's brand new.

I'd halve the credit limit.  While my credit standing is good & my credit card usage was less than 10% I received a $2,500 limit. 

sandman619

wood1208 said:

I don't see promo offered as part of signing up for Apple Card like many other banks card/s do. So, not sure what the statement "some $350 to acquire each Apple Card user" mean ?

The previous line was GS capital layout, so that would include the funding of the balances & possibly the payment processing. 

GeorgeBMac

rob53 said:

Difficult to understand loan balances when the card doesn't really have a pay date. I end up using it like a combination credit and debit card, paying off chunks of purchases a few times a month. Not sure if my balance would show in this case. 

Is $10B of credit lines a lot or a normal amount?

I use it more as a conventional credit card:   I wait till the 1st of the month to print my statement, then reconcile the account on Quicken from that statement (manually unfortunately since there is no download) then schedule a payment for the balance a few days prior to the end of the month when it is due.

My main complaints about that:
1)  There is no download to Quicken so I have to do the reconciliation by hand
2)  I have no control over the period end date so AppleCard is an outlier that I need to handle separately (all my other cards end on the 23rd or 24th of the month)
3)  I cannot pay by check or even let my bank send a payment - I am forced to let Goldman store my bank account info on their site as that's the only way to pay.

I'm thinking the Apple Card was designed for young people naive to credit cards.   For myself, I find my other, more traditional cards much easier to deal with.  AppleCard is mostly a PIA -- so I restrict it to Apple purchases only. 

I think Goldman & Apple need to up their game for this card if they want it to become mainstream.  While it is simple, it is also restrictive.

larryjw

aaarrrgggh said:

So, likely around a million cards/accounts. Not bad...

Agreed. I assumed the credit limit for Apple Card was an average of $7500. That comes to about 1.3 Million accounts. 

Some estimates say Apple Pay has about 253M users worldwide with international Apple Pay users actually accounting for more at 215 million versus 38 million in US.

GS, I'm guessing, will only handle US customers so they will top out at 38 million Apple Card accounts. Internationally is where Apple Card can expand substantially. 

Folio

So probable range of users in first few months is 1 million (if average credit is $10,000) to 5 million customers (if average credit is $2,000). Either way that's good start, and more importantly lots of room to grow.... on a personal note over two months I find this Applecard experience to be the best and most convenient. Initially I worried it might be too nagging, being embedded as a heavy phone user, but it's not. There's some Apple magic at work to make a dull or irksome experience kind of pleasurable.

apple ][

sandman619 said:

apple ][ said:

I'm just pulling this out of my butt, so basically, I'm doing the same things that analysts do when they speculate about Apple, but if we figure out an average of about a $5,000 limit per user, then that would come out to about a couple of million users so far (10 bill / 5000). Not bad for a card that's brand new.

I'd halve the credit limit.  While my credit standing is good & my credit card usage was less than 10% I received a $2,500 limit. 

It's certainly possible that it's around $2,500.  That would make about 4 million users.

A few comments below yours, there's somebody else who's guessing $7,500. That's probably a bit on the high side.

My $5,000 butt pull figure is right in the middle of your estimate and the $7,500 estimate, but the actual figure is probably closer to $2,500 than it is to $7,500 imo.

StrangeDays

rob53 said:

Difficult to understand loan balances when the card doesn't really have a pay date. I end up using it like a combination credit and debit card, paying off chunks of purchases a few times a month. Not sure if my balance would show in this case. 

Is $10B of credit lines a lot or a normal amount?

It absolutely has a monthly pay date. You’re charged interest on the monthly balance unpaid after that date. 

StrangeDays

GeorgeBMac said:

rob53 said:

Difficult to understand loan balances when the card doesn't really have a pay date. I end up using it like a combination credit and debit card, paying off chunks of purchases a few times a month. Not sure if my balance would show in this case. 

Is $10B of credit lines a lot or a normal amount?

I use it more as a conventional credit card:   I wait till the 1st of the month to print my statement, then reconcile the account on Quicken from that statement (manually unfortunately since there is no download) then schedule a payment for the balance a few days prior to the end of the month when it is due.

My main complaints about that:
1)  There is no download to Quicken so I have to do the reconciliation by hand
2)  I have no control over the period end date so AppleCard is an outlier that I need to handle separately (all my other cards end on the 23rd or 24th of the month)
3)  I cannot pay by check or even let my bank send a payment - I am forced to let Goldman store my bank account info on their site as that's the only way to pay.

I'm thinking the Apple Card was designed for young people naive to credit cards.   For myself, I find my other, more traditional cards much easier to deal with.  AppleCard is mostly a PIA -- so I restrict it to Apple purchases only. 

I think Goldman & Apple need to up their game for this card if they want it to become mainstream.  While it is simple, it is also restrictive.

LOL no. My friends and I who use the card are middle aged, and one owns his own jet. I do not and will never perform the sort of account reconciliation you perform. Instead I just pay my monthly balance before the due date. 

Also, are you certain GS stores your banking info? I don’t know who initiates the ACH, GS or Apple.