Apple announces big change to its credit card

Apple has announced a major change to its credit-card program.

The tech giant has reached a deal with JPMorgan Chase, people familiar with matter told the Wall Street Journal. 

Apple’s credit card was previously issued by Goldman Sachs, but now the biggest bank in the country is set to take over. 

JPMorgan’s defeat of Goldman Sachs in the bid for control over Apple’s credit card cements Goldman’s failure to venture into consumer lending. 

The deal, bringing two of the countries most powerful and influential companies together, is expected to be announced soon.

As people increasingly use devices like cell phones and watches to make payments, it’s logical for the most profitable technology company and the largest bank to join forces in a joint venture.  

Goldman and Apple launched the Apple Card in 2019 with slick marketing and bold promises that it would be a simpler alternative to traditional credit cards.

Losses piled up for Goldman and more customers than expected fell behind on payments.

Goldman is expected to offload the Apple Card balances at a discount of more than $1 billion — a rare outcome in the lucrative world of co-branded credit cards. Card portfolios usually sell for more than they’re worth.

That markdown reflects concerns about Apple having risky customers who will not pay back balances.

JPMorgan will issue Apple credit cards for both new and existing customers, according to sources. The switch from Goldman Sachs, which is typical for most card transitions, will take some time.

JPMorgan also plans to launch a new Apple savings account. Customers with existing Apple savings accounts at Goldman will have the option to keep their account there or move it to JPMorgan.