Apple's new Apple Card & Goldman Sachs statement doesn't clarify things at all

AppleInsider · November 29, 2023 8:40PM

Goldman Sachs and Apple seem likely to part ways by early 2025, but a vague statement from Apple provides little reassurance to existing Apple Card customers.

Apple Card

Nothing is set in stone, but after months of complaints from Goldman Sachs, Apple has sent a proposal to the bank to end their partnership in 12 to 15 months. The proposal hasn't been made public and no successor has been named.

Apple provided a statement to AppleInsider and other publications on the matter. However, it was vague and didn't provide any new information.

"Apple and Goldman Sachs are focused on providing an incredible experience for our customers to help them lead healthier financial lives. The award-winning Apple Card has seen a great reception from consumers, and we will continue to innovate and deliver the best tools and services for them."

Apple's message should provide some peace of mind to existing Apple Card and Apple Savings customers. While it doesn't really say much, the fact Apple said anything at all is a good sign.

If a product is expected to be phased out or replaced, Apple tends to stay silent about it. Apple's financial services are expected to shift from Goldman Sachs to another firm.

Discussions have allegedly been held with American Express, and Synchrony Financial has also shared interest in taking over. However, whatever bank Apple chooses next will likely not offer as many freedoms for the company as Goldman Sachs.

Issues arose with the partnership from the start, with Apple stating Apple Card didn't come from a bank, demanding that all bills be due at the start of the month, and increased regulatory scrutiny. Goldman Sachs has made it clear that it intends to withdraw completely from consumer banking.

Apple Card and Apple Savings should remain operational throughout this transition, and anything otherwise will be communicated by Apple. For now, everything will continue to work as it has since Apple Card debuted in 2019.

Read on AppleInsider

kierkegaarden · November 29, 2023 9:39PM

For me, the attraction is the app experience. I will say that the AmEx app experience is a close second. I don’t see why Apple would make any demands around payment dates, late fees, etc. — the integration into Wallet, Daily Cash, and 2%/3% using Apple Pay is plenty. I would like to see built in insurance/buyer protection. Charge an annual fee if you have to.

ddawson100 · November 29, 2023 10:20PM

"Apple and Goldman Sachs are focused on providing an incredible experience for our customers." TV and fitness show that they're willing to spend so much money and take many years. Hopefully financial services succeeds. It's not quite there for me yet but I look forward to Apple continuing to develop this.

neverindoubt · November 29, 2023 10:32PM

Kierkegaarden said:

For me, the attraction is the app experience. I will say that the AmEx app experience is a close second. I don’t see why Apple would make any demands around payment dates, late fees, etc. — the integration into Wallet, Daily Cash, and 2%/3% using Apple Pay is plenty. I would like to see built in insurance/buyer protection. Charge an annual fee if you have to.

I'd be surprised if they started any fees, particularly since their basic marketing has been "No fees." since the beginning.
The current value proposition of Apple integration, no annual fee, no international transaction fee, 1/2/3% cash back is pretty competitive in the US for a cash back card. Adding an annual fee would put it into competition with lots of cards that have better features for a lot of people.

saarek · November 29, 2023 10:50PM

Goldman Sachs apparently claim that they have lost billions of dollars on this venture. I'm not sure how this is possible. If the claim was that they'd lost billions of dollars in profits, I'd understand, but to actually lose money seems nonsensical. Surely they worked out adequate running costs to ensure that they'd at the very least break even?

jimh2 · November 29, 2023 10:59PM

The due date of the bills is not relevant as some cards already allow you to pick your own payment due date. It’s significantly easier to know a bill is always due on the 1st.

rob53 · November 29, 2023 11:49PM

We’ll see what happens to our credit ratings when the GS Mastercard is dropped. I have excellent credit but having a new credit card will reduce my credit age. Amex isn’t always taken at stores and restaurants so it might not be a good replacement.

daviator · November 29, 2023 11:50PM

jimh2 said:

The due date of the bills is not relevant as some cards already allow you to pick your own payment due date. It’s significantly easier to know a bill is always due on the 1st.

I think the issue is that by having the same due date for everyone, it creates a customer service issue around the beginning of every month as customers call in with questions/issues all at the same time instead of being spread through the month. That, in turn, creates big staffing challenges for the bank.

zoetmb · November 30, 2023 12:12AM

In spite of credit checks up front (my granddaughter, recently graduated from college, was rejected), I bet there must be a surprisingly high default rate combined with a high number of users paying off at the end of each month and therefore, not paying interest. And there’s no fee.

But I’d be shocked if Apple didn’t find another financial institution to take on the card, especially if the savings account goes with it. They will want those assets.

But if they don’t, it’s not that big of a deal. I certainly got along without it before it existed and I have several other cards.

One thing that bothers the OCD side of me is that the last few transactions of a given month are frequently tied to the following month. It’s not strictly calendar month even though all the past transactions are tied to a calendar month.

I think Apple will have to relent on the common billing date with the next vendor.

The other issue will be that with a new bank, I bet we have to reapply and get a new account. Bet they also give up that fancy physical card (which I never carry anyway).

rogue01 · November 30, 2023 1:08AM

"Apple and Goldman Sachs are focused on providing an incredible experience for our customers to help them lead healthier financial lives. The award-winning Apple Card has seen a great reception from consumers, and we will continue to innovate and deliver the best tools and services for them."

Next sentence from Apple - Goldman Sachs is bailing on the card in 2025, so after that, who knows, because we are not a bank. Without a supporting bank, no card.

I got the Apple Card to buy an iPad and pay it off over 12 months. I liked how it billed each month the amount that was due for the 12 month period. That was convenient. But not everything from Apple qualified for the 0% 12 month payment plan. I just made my last payment on the iPad, so doubtful I will use the card again. So if it goes away in a year, I won't miss it.

dcgoo · November 30, 2023 2:55AM

My wife and I, really like the full month float, plus you get the 1, 2 or 3% spiff immediately, long before you have paid the bill. We’ve been able to get our credit limit up to something usable, north of 25k each. We use it for everything, except Costco. Visa would be nice for that.

Since an account sets up an account number for each device, it is very easy to shut off the physical card, without shutting the entire account. Same for the virtual number. I don’t think any other firm does that.

iMessage access to customer service is great, and has worked well for us.

Bottom line, it works for us, and GS pays us a thousand bucks a year (times two), to use it. What‘s not to like?

chadbag · November 30, 2023 3:16AM

zoetmb said:

In spite of credit checks up front (my granddaughter, recently graduated from college, was rejected), I bet there must be a surprisingly high default rate combined with a high number of users paying off at the end of each month and therefore, not paying interest. And there’s no fee.

But I’d be shocked if Apple didn’t find another financial institution to take on the card, especially if the savings account goes with it. They will want those assets.

But if they don’t, it’s not that big of a deal. I certainly got along without it before it existed and I have several other cards.

One thing that bothers the OCD side of me is that the last few transactions of a given month are frequently tied to the following month. It’s not strictly calendar month even though all the past transactions are tied to a calendar month.

…

The other issue will be that with a new bank, I bet we have to reapply and get a new account. Bet they also give up that fancy physical card (which I never carry anyway).

The reason the last few transactions you make in a month are tied to the next month is that the transaction is “completed” in the next month. When a merchant charges your card that just puts it (the charge) in a queue, so to speak, which is called a batch. Usually the merchant will close their batch at the end of the day. Some processors auto close a batch and some make you manually close your batch. Only then does the charge become “final” and get processed, meaning sent to the bank that issued your card. Once they’ve sent the money and all the backend stuff is settled by the parties does the transaction post to your account. This can take a day or often two or three. This is why you log in and it says pending. The post date is the key one. Not the day you charged.

When Citi sold their Hilton branded card business to Amex we did not have to re-apply. We just got new Hilton branded Amex cards in the mail. Balances and everything were carried over to Amex. The difference is that the Citi was a was a Visa while the Amex was obviously an American Express card. As American Express already had a Hilton branded card when they took over the Citi Hilton cards and I already had one, I to this day have two separate Amex Hilton cards.

stabitha_christie · November 30, 2023 5:36AM

rob53 said:

We’ll see what happens to our credit ratings when the GS Mastercard is dropped. I have excellent credit but having a new credit card will reduce my credit age. Amex isn’t always taken at stores and restaurants so it might not be a good replacement.

Okay, “credit age” is kind of a weird term to use but I assume you mean credit history. If so, then this shouldn’t impact your credit history. You will show an account closed with one bank and another opened with a new bank. That doesn’t change the length of your credit history.

sflagel · November 30, 2023 10:55AM

I never understood what Apple brought to the table in this deal, other than their logo. Apple is just the distributor. The card is issued by GS; credit extended by GS; cash-back paid by GS; billing, customer service, etc. provided by GS. This is just a white labelled credit card, with a good app - there are plenty of these in the world, all of which can be added to Apple Wallet. GS wanted to make the deal because as a newcomer to the CC market, which has very high marketing costs, they saw a lot of value in Apple distribution, but I doubt any established card issuer will see it this way.

sflagel · November 30, 2023 10:56AM

..........

edited November 2023

gatorguy · November 30, 2023 11:50AM

Stabitha_Christie said:

rob53 said:

We’ll see what happens to our credit ratings when the GS Mastercard is dropped. I have excellent credit but having a new credit card will reduce my credit age. Amex isn’t always taken at stores and restaurants so it might not be a good replacement.

Okay, “credit age” is kind of a weird term to use but I assume you mean credit history. If so, then this shouldn’t impact your credit history. You will show an account closed with one bank and another opened with a new bank. That doesn’t change the length of your credit history.

Incorrect assumption. Credit age is not at all a weird term, it's a real thing.

Part of your credit score rating is the age of your accounts. The older the account the better. That means generally not closing old accounts even if you don't use them.
Having a few new accounts gets a flag.

BTW, are you curious what may become of a GS replacement for the AppleCard? Maybe Pismo.

edited November 2023

sdw2001 · November 30, 2023 1:33PM

Stabitha_Christie said:

rob53 said:

We’ll see what happens to our credit ratings when the GS Mastercard is dropped. I have excellent credit but having a new credit card will reduce my credit age. Amex isn’t always taken at stores and restaurants so it might not be a good replacement.

Okay, “credit age” is kind of a weird term to use but I assume you mean credit history. If so, then this shouldn’t impact your credit history. You will show an account closed with one bank and another opened with a new bank. That doesn’t change the length of your credit history.

Credit history and age of accounts absolutely impacts your credit score.

sternapples53 · November 30, 2023 2:01PM

I'd love to see the data were they are losing money. Banks make money off of each sale and the finance charges to each customer. Credit cards are always a win, win for the banks. Goldman does have a saving bank it's called Marcus. If the Apple Card goes away PayPal Mastercard will be my main card at 2% cash back with the card and 3% online. I really like the Apple Card because of no foreign access fees when I travel outside the US.

sbdude · November 30, 2023 3:36PM

The only reason I got the card was the attractive no-interest financing on Apple products. And even that has become less attractive as Apple/GS only give one year (one!) to pay off a mac, and two years to pay off an iphone (because that makes sense).

As far as transitioning banks, no, you won't have to "reapply" for a new card. When Costco dumped Amex for Citi, I did not have to reapply, and all balances, credit limits, etc. carried over without issue. Yes, it will show as a closed account and, if it was your card with the most longevity, it would affect your score. Given how new the apple card is, I doubt it establishes a majority of users' credit histories or is their "lengthiest" card.

blastdoor · November 30, 2023 3:50PM

One way or another I bet Apple keeps this card alive and expands their financial services business.

Elon Musk dreams of turning X into the “everything app” including financial services. He will fail. But Apple will succeed — the everything app will just be the iPhone plus Apple services.

I still think Apple will eventually include transportation, too.

sflagel · November 30, 2023 4:10PM

sbdude said:

The only reason I got the card was the attractive no-interest financing on Apple products. And even that has become less attractive as Apple/GS only give one year (one!) to pay off a mac, and two years to pay off an iphone (because that makes sense).

As far as transitioning banks, no, you won't have to "reapply" for a new card. When Costco dumped Amex for Citi, I did not have to reapply, and all balances, credit limits, etc. carried over without issue. Yes, it will show as a closed account and, if it was your card with the most longevity, it would affect your score. Given how new the apple card is, I doubt it establishes a majority of users' credit histories or is their "lengthiest" card.

Why is the credit score so important? You really only need good credit once: when you want to get a mortgage. Surely, mortgage lenders look at income vs expenses, savings, outstanding loans, and value to mortgage ratio more closely than they look at a credit score.

Apple's new Apple Card & Goldman Sachs statement doesn't clarify things at all

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