From rumors to titanium, bad debts and a new backer -- Apple Card is seven years old

With its move to JP Morgan Chase, Apple Card is facing its first major change — but don't assume that the story of how it got to here is anything but a rocky road.

Apple Card and all of Apple's financial services that go along with it, do seem a very long way from how the company started out. But it isn't at all far from how in the 1980s, the company looked into financing in order to sell its expensive new Macintosh.

It's hard now to be certain when this started, but at least one Apple Computer-branded credit card existed in 1984. Then there was one consumer credit card and one business one in 1986, a year after Steve Jobs left the company.

Given that Jobs was gone and the credit card program was not only continuing but featured in print ads, presumably then-CEO John Sculley was behind it.

Then this is supposition, but the odds are that Apple just signed on to whatever corporate branding scheme credit card companies had available. Apple Computer Card was not about making Apple money, it was about making it easier to sell costly Macs, without admitting how expensive those were.

"Aside from cash," ran some of the print ads, "it's the most affordable way we can think of to buy one of the most affordable computers we know of."

It's also hard to determine now when the program stopped, but it appears to have been during the 1990s.

So since at least most of the Apple Computer credit card efforts happened while Steve Jobs was out of the company, you could assume he was against it. It's easy to presume that Steve Jobs would never do a credit card, that he would never be distracted from hardware products to set up a financial one.

But actually, he tried. And he tried for something more involved than putting Apple's name on someone else's credit card.

He tried very hard, too. So the difference between Jobs and Tim Cook is not that the former was focused on hardware, it's that the latter could pull off a complex deal.

That's because what Jobs was proposing as long ago as 2004, was an Apple Card backed by Mastercard. It would have benefits but they would be iTunes "iPoints" instead of cash as Cook's version would have 15 years later.

There must've been something in the air, because in 2005, Microsoft launched Xbox Live Points, and later renamed them Microsoft Points. You accrued points by buying products, and you could then use the points against future purchases.

Points were a worthless idea and far from the simplicity that Apple and Jobs prided themselves on. You had to calculate what the value of a point is, for one thing, and of course it was always less than you imagined.

However, we will never know whether Apple users would've accepted points, or whether Jobs would have switched to the more sensible cash. For while Steve Jobs was able to talk record companies into backing iTunes, he was never able to quite close the deal with Mastercard.

In the late 1990s, he also failed to close a deal with Capital One over a joint credit card. Reportedly, Jobs "had an aversion" to rejecting any customers for a card, and that proved too risky for Capital One.

But Jobs did get far enough that he had Apple creative director Ken Segall and his team work on ads specifically about the music rewards that would come from using this card. "Buy lipstick, get Kiss," said one. "Buy bed, get R.E.M.," said another.

Apple Card gets real

Flash forward to around 2018 when the first strong rumors of Apple making what we would today recognize as an Apple Card began to appear. Throughout that year, progressively more detailed rumors appeared, including that it would be Goldman Sachs that would back the card.

These rumors were credible because since around 2009 or 2010, Apple had stepped up its financial offering. It had been partnering with Barclays over financing arrangements.

Those arrangements varied enormously between countries, but the principle was always that it was a way for customers to spread the cost of Apple's costly devices.

Then from 2014, there was Apple Pay. And Tim Cook claimed that this payment system really was exactly what Apple does best. Speaking of how previous digital wallets had been a failure, he basically said it was because Apple hadn't tried it yet.

"It's because as it turns out, most people that have worked on this have started by focusing on creating a business model that was centered around their self-interest instead of focusing on the user experience," he said. "We love this kind of problem. This is exactly what Apple does best."

It was similar to how before he launched the iPhone, Steve Jobs methodically presented just how Apple actually had years of expertise making mobile products, like the PowerBook or the iPod. But whether it was really to solve a design problem or was just another way to get some cash into the company, it worked. In 2019, the first year that Apple Card came out, reports say Apple earned $998 million in revenue, crossing the billion mark in 2020.

And that same year AppleInsider reported how use of Apple Pay had zoomed ahead of the existing PayPal and Google Pay.

Apple had a strong financial service, and the infrastructure to cope with billions of transactions a year. It had a user base that was now enormous and willing to buy expensive items.

No wonder Goldman Sachs was up for backing an Apple Card.

Dealing with Apple

Anecdotally, company CEOs have told AppleInsider that making a deal with Apple is not as great as you might think. We've heard of company owners walking away from Apple deals because the terms were so poor.

But those were small developers and tiny component suppliers, this was the enormous Goldman Sachs. In 2019, it had net revenue of $36.55 billion (according to Statista). It had just under 40,000 employees globally and at that point was easily one of the world's leading investment banks.

It's possible that Goldman Sachs even thought it was doing Apple a favor launching this Apple Card. But then at the same time, it was looking to move more into consumer credit, and if Apple has anything, it has consumers.

Goldman Sachs was all-in on this plan to develop a consumer business model for itself, and even went further than just partnering with Apple. In 2020, it acquired the existing General Motors credit program, the GM Card.

Apple was expanding its financial revenues in a time when iPhone sales were trending downwards. Goldman Sachs was going to clean up in consumer credit.

And Apple Card users did genuinely get a well-designed card. That's not just in how the payment system worked, but also literally as the physical card was made of titanium.

What could possibly go wrong?

It goes wrong

The first clue that there could be a problem came slowly. It was that Apple Card remained a US-only product, despite Tim Cook saying right back in 2019 that it was going international.

To be clear, Apple Card itself is and continues to be good. You don't ever want to miss a payment on it because Apple's interest rates are high, but that's sensible advice for any credit card.

Then, too, its rewards are less than on rival cards, but you do get cash back on many or even most purchases.

And with Apple Card, every user can know precisely what their financial state is at any moment they want. Every transaction is logged and categorized, while exceptionally clear details on the iPhone show how much is owed and when it's due.

Then speaking of when payments are due, Apple insisted that every user be billed at the end of the month. Maybe Goldman Sachs shrugged at that, figuring that it had the financial expertise to do whatever it needed, so let Apple have its little foibles.

Apple was right and smart to do this because it does help users always know where they stand. It's another example of Apple design focusing on the user first. Yet compared to other cards where each user's bill might be set to a different date in the month, Apple's demands stressed out Goldman Sachs's systems.

The investment bank had already spent heavily in preparation for Apple Card — reportedly investing $275 million in 2019 alone. And it was also said to be spending around $350 for every person who signed up, meaning it would only turn a profit when someone had been a user for four years.

So Goldman Sachs was in deep here, it was committed, yet operating Apple Card on this monthly basis was difficult. Even so, Goldman Sachs told its investors in October 2019 that its Apple Card was "the most successful credit card launch ever."

But by November 2019, there was controversy. It wasn't because of interest rates or rewards, it was to do with alleged sexism.

That's David Heinemeier Hansson, who was best known then for complaining about the App Store, but he wasn't the only one objecting to Apple Card's credit scoring algorithm. Apple co-creator Steve Wozniak jumped on the train too, and then US senators got involved.

"We have not and never will make decisions based on factors like gender," responded Goldman Sachs Bank CEO Carey Halio at the time. "In fact, we do not know your gender or marital status during the Apple Card application process."

According to the New York Department of Financial Services which investigated the accusation, Goldman Sachs was telling the truth. In 2021, the department reported that the investigation "did not produce evidence of deliberate or disparate impact discrimination."

Although that same investigation did show "deficiencies in customer service and transparency."

Separately, there were also allegations that Apple Card was accepting subprime applications. Still in 2019, the accusation was that customers with poor credit histories were being accepted. It wasn't as bad as it could have been under Steve Jobs and his preference to allow credit to anyone, but subprime applications come with known problems such as users not repaying their debt.

It remained just an allegation that Apple Card was doing this, but then there were other accusations which were borne out. In 2022, the Consumer Financial Protection Bureau (CFPB) opened an investigation into Goldman Sachs's consumer card management.

The CFPB did not like what it found and blamed a rushed launch for Apple Card failures such as erroneous bills and inadequate service. In October 2024, it fined Goldman Sachs $45 million and required it to pay at least $19.8 million in redress.

Apple didn't get off lightly either — it was ordered to pay a $25 million fine. But it was definitely Goldman Sachs that had it worst.

"Apple and Goldman Sachs illegally sidestepped their legal obligations for Apple Card borrowers," said CFPB Director Rohit Chopra in a statement. "The CFPB is banning Goldman Sachs from offering a new consumer credit card unless it can demonstrate that it can actually follow the law."

Maybe that was it, maybe that was when Goldman Sachs decided it had just about enough of Apple and all consumer credit cards. In the next month after that fine, November 2024, Goldman Sachs sold off its whole stake in the GM card to Barclaycard.

But by then, Goldman Sachs had been unhappy with Apple Card for years — and was finding that could not get out of the deal as easily as it did the GM Card.

Goldman Sachs wants out

Maybe it was baked into the Apple contract from the start, or maybe this is a case of one department not knowing what the other is doing. For in April 2023, even as the relationship was souring, Goldman Sachs and Apple launched an adjunct to the Apple Card in the form of a high-yield Apple Savings account.

But it was later reported that just as it was launching this, a Goldman Sachs executive exploded. He or she is reported to have said in front of colleagues that "we should never have done this f****** thing."

Goldman Sachs did manage to pull back on one element, though. In September 2023, it was revealed that it and Apple had planned a stock trading app, but both sides had agreed to abandon the project.

But by this time, Apple Card had been investigated for sexism, investigated for fraud, and more than anything else, it was costing Goldman Sachs dearly. In just 2022, Goldman Sachs lost $1.2 billion, chiefly because of Apple Card.

Divorce is hard

By 2025, Goldman Sachs was publicly saying it wanted to get out of its contract with Apple, which had been due to run until 2030. It appears that the only way out of that contract, though, was to find some other mug to take it on.

It was rumored that Apple itself might take on the entire operation. But ultimately it was JP Morgan Chase that took over Apple Card.

"We're incredibly proud of how Apple Card has transformed the credit card experience for customers by delivering innovative tools that empower users to make healthier financial decisions," Jennifer Bailey, Apple's vice president of Apple Pay and Apple Wallet said at the time. "Chase shares our commitment to innovation and delivering products and services that enhance consumers' lives."

"We look forward to working together to continue to provide a best-in-class experience and exceptional customer service with Apple Card," she continued.

Existing users will not see any visible change. Given JP Morgan Chase's international presence, however, there may finally be a rollout of Apple Card beyond the US. It won't happen quickly, though, as the finance firm said in January 2026 that it expects to take 24 months to complete taking over Apple Card from Goldman Sachs.

Still, in May 2025, there was a new Apple Card promotion that potentially saw new subscribers get free AirPods Pro. There were conditions, there was a catch, but what's significant is that this was the first time Apple had offered any such signup promotion.

Neither Apple nor JP Morgan Chase would confirm which company initiated the promotion. But the fact that was something never done when Goldman Sachs was in contract, it does suggest that the new deal will see Apple and JP Morgan Chase making new attempts to attract customers.

Whether that happens or not, JP Morgan Chase is braced for some serious costs just over the existing business. Its profits dropped 7% after the announcement of it taking over Apple Card, chiefly because of potential loan losses.

That accusation of Goldman Sachs and Apple taking on subprime applicants has proven to be true — and a huge problem. It's reported that when negotiations first started with JP Morgan Chase in 2024, unpaid balances on Apple Card were $17 billion.

Nonetheless, all through this, Apple Card itself has continued to be well designed and useful. Tim Cook's comments about the need for better design for customers over payment systems has proven true.

But then he did say in that same breath that previous firms had concentrated more on their business models. Maybe Apple and Goldman Sachs should have done more of that too.