WSJ: Apple Card could switch from Goldman Sachs to Chase and change ‘key’ features

The Apple Card, a product that merges sleek tech with everyday finance, is facing an uncertain future. Goldman Sachs, which currently manages the Apple Card, is eager to exit the consumer credit business after accumulating over $6 billion in losses. This situation has led Apple to explore new partners for its credit card, with the latest potential partner being JPMorgan Chase. Talks between Apple and JPMorgan have gained traction in recent weeks. However, a final deal could still be months away, as crucial details like the purchase price of Apple Card’s $17 billion in outstanding balances remain undecided.

Interestingly, JPMorgan Chase wants to acquire these balances for less than their full value, a strategic move that reflects common practice in the credit card industry. Often, portfolios of loans with high delinquencies are sold at a discount to mitigate risks. Apple’s credit card program reportedly includes some subprime exposure, which means that taking on this debt may come with significant challenges for any potential partner.

One of the main sticking points in these negotiations is the billing system. All Apple Card users receive their statements at the beginning of each month, leading to customer service headaches for Goldman Sachs. Should JPMorgan take over, it is keen to change this system and potentially make other adjustments to the card’s terms and operations, though exact details remain unclear for now.

Despite the uncertainty, it’s clear that Apple is looking for a partner who can handle the logistics and the financial risk of managing its credit card business. However, JPMorgan isn’t the only company Apple has spoken to; potential partnerships with other financial institutions like Capital One, Synchrony Financial, and American Express have also been explored. For now, all eyes are on how Apple and JPMorgan will navigate these talks and what this could mean for the millions of users who currently depend on the Apple Card for their daily spending……….[read more]

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With banks like Goldman Sachs looking to exit consumer credit markets and JPMorgan angling to get Apple’s credit portfolio at a discount, how do shifts in business partnerships impact the balance of power between consumers, investors, and shareholders?

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