Goldman Sachs is bailing on the Fruity Cargo Cult Apple Card and is prepared to pay $1 billion to make the problem go away.
After more than a year of negotiations, reports say Job’s Mob has struck a deal with JPMorgan to take over the card business Goldman wants off its books.
Goldman Sachs will transfer Apple Card accounts with roughly $20 billion in outstanding balances to JPMorgan, and that discount tells you how much fun the portfolio has been.
Job’s Mob launched the card in 2019 with Mastercard and Goldman Sachs, pitching it as a slick, fee-free option that lives inside your phone.
Users get unlimited two per cent cash back with Apple Pay, or unlimited three per cent cash back at Job’s Mob partner merchants, which is great until you are the bank funding it.
The card comes with no foreign transaction fees, no late fees and no returned payment fees, plus 0 per cent financing APR on Job’s Mob hardware.
While this sounds pretty good, those perks led to heavy losses for Goldman, especially alongside higher-than-average delinquency and the need to front-load reserves.
Now JPMorgan has to issue new cards to existing cardholders. The plan includes a new Apple Savings account at JPMorgan, with customers able to move to it or keep banking with Goldman Sachs.
Job’s Mob has confirmed that JPMorgan and Mastercard will power the new Apple Card, with the switch expected to be completed within 24 months.
In the meantime, cardholders can keep using their existing cards as normal, while everyone waits to see which perks survive the handover.
