WSJ: Inside Apple's 'unhappy marriage' with Goldman Sachs for Apple Card

The partnership that created the Apple Card has officially come to an end, but the full story of its dissolution reveals a relationship strained by conflicting business goals, risky lending practices, and a fundamental mismatch in expectations. According to a detailed report from The Wall Street Journal based on conversations with twenty people familiar with the matter, what Apple internally called an "unhappy marriage" was years in the making, ultimately requiring private credit firms, multiple bidding wars, and delicate negotiations to untangle.

The Core Conflict: Approval Rates vs. Risk Management

At the heart of the Apple-Goldman tension was a fundamental disagreement about who should qualify for the Apple Card. According to the WSJ report, Apple pushed Goldman Sachs to approve nearly all applicants for the card, a strategy that would expand the card's user base and integrate it deeply into Apple's ecosystem. Goldman Sachs, operating as a traditional lender, found itself caught between Apple's growth ambitions and its own risk management requirements.

The results of this approach were stark. More than 30% of Apple Card balances are held by people with credit scores below what most lenders define as prime. This percentage is notably higher than many banks that actually specialize in subprime lending. For context, subprime lenders typically target borrowers with FICO scores below 670, yet the Apple Card portfolio skewed even more heavily toward this segment than dedicated subprime operations.

This lending profile created significant financial pressure on Goldman Sachs. The bank, which entered the consumer lending space with ambitions of competing with established players, found itself managing a portfolio that was riskier than anticipated. The subprime exposure meant higher default rates, more charge-offs, and ultimately, losses that eroded the profitability of the partnership.

The Private Credit Solution That Never Materialized

As the relationship deteriorated, Apple, Goldman Sachs, and potential successor banks explored an unconventional solution: transferring the Apple Card balances to a private credit fund. This approach would have represented new ground for Wall Street, as private credit funds typically handle smaller, more bespoke financing deals rather than multi-billion dollar credit card portfolios.

The complexity of such a deal attracted attention from major players. Goldman Sachs bankers reached out to private credit firms to gauge interest. Barclays, while considering its own bid for the Apple Card, approached private equity firm KKR about arranging a private credit partnership. Apple itself hired a boutique investment bank to help find a suitable fund and even discussed the possibility with a small fintech company.

However, these efforts ultimately proved too complex to execute. Private credit funds specialize in illiquid, custom-tailored financing solutions, not the revolving, high-volume nature of credit card debt. The sheer scale of the Apple Card portfolio—combined with the subprime risk profile—made it an unattractive and unprecedented challenge for these specialized lenders.

A Multi-Way Negotiation Process

The search for Goldman Sachs's replacement became a complex, multi-party negotiation that spanned more than a year. Goldman Sachs had initially hoped that Apple would make a decision on a replacement issuer by early March 2025, allowing the transition process to begin. That timeline slipped repeatedly, creating frustration on the Goldman side, where executives reportedly felt Apple wasn't following through on its commitments.

During this period, Apple maintained relationships with multiple potential partners simultaneously. At one point, the company was actively working on three separate contracts with Chase, American Express, and Synchrony. Each brought different strengths and strategic value to the partnership.

Synchrony Financial, a store card specialist, reportedly became convinced it had secured the deal and began optimizing its operations for the Apple Card portfolio. The company explored ways to minimize the costs associated with turning over the card program, preparing for what it believed was a successful acquisition.

American Express also participated in the bidding process, bringing its premium card expertise and established infrastructure. However, the company ultimately didn't progress to the final stages.

Capital One represented another late entrant to the process. Apple reportedly reached out to Capital One executives, telling them a deal was imminent but giving them one final opportunity to submit a bid. Capital One, however, was focused on its massive acquisition of Discover Financial Services, which would make it the largest credit card issuer in the United States. While the company did take meetings with Apple and Goldman Sachs as late as June 2025, the Discover deal consumed its strategic attention and resources.

The Chase Agreement: Terms and Protections

Ultimately, Apple selected JP Morgan Chase as its new partner, a choice that makes strategic sense given Chase's scale, technology capabilities, and existing relationship with Apple through other services. However, the final agreement included significant protections for Chase that reflect the risks inherent in the Apple Card portfolio.

Chase negotiated for protection in the event that card delinquencies spiked or performance deteriorated in the period after the banks signed the contract. This type of provision, known as a "make-whole" agreement or performance guarantee, essentially means that Goldman Sachs or Apple would compensate Chase if the portfolio performed worse than expected during the transition period.

Additionally, Chase secured the right to walk away before the deal closed if certain conditions weren't met. This exit clause provided Chase with flexibility and reduced the risk of being locked into an unfavorable arrangement if the portfolio's quality declined further or if other material changes occurred.

These protections were likely essential for Chase's board and risk committees to approve the acquisition of a portfolio with such a high subprime concentration. Without them, Chase would have been taking on significant credit risk without adequate compensation.

The Transition Timeline

The transition from Goldman Sachs to Chase is expected to take approximately two years, a relatively long timeframe that reflects the complexity of transferring a credit card program. During this period, existing Apple Card users will continue to use their cards without interruption, but the backend operations, underwriting, customer service, and risk management will gradually shift from Goldman to Chase.

This extended timeline allows for:

• Data migration: Transferring customer account information, transaction histories, and credit profiles
• System integration: Connecting Chase's processing systems with Apple's Wallet app and backend infrastructure
• Regulatory approvals: Ensuring compliance with banking regulations and obtaining necessary approvals from regulators
• Customer communication: Managing the transition with clear messaging to millions of Apple Card users
• Risk transfer: Gradually moving the credit risk from Goldman's balance sheet to Chase's

Apple has stated it will provide more details as the deal progresses, but the company has been relatively quiet about the specifics of the transition. This silence may reflect the complexity of the negotiations and the ongoing nature of the relationship with Goldman Sachs during the transition period.

Lessons for Platform-Banking Partnerships

The Apple Card saga offers several important lessons for the intersection of technology platforms and financial services:

1. Growth vs. Risk Management: Technology companies often prioritize user acquisition and ecosystem integration, while banks must balance growth with prudent risk management. This fundamental tension requires clear alignment from the start.

2. Portfolio Quality Matters: Expanding access to credit is a worthy goal, but subprime lending requires specialized expertise and risk controls. The Apple Card's subprime concentration exceeded even dedicated subprime lenders.

3. Exit Strategies Are Essential: Complex partnerships need clear terms for dissolution. The lengthy, multi-party negotiation to unwind the Goldman relationship shows how difficult these transitions can be without proper planning.

4. Private Credit Isn't a Panacea: While private credit has expanded into new areas, traditional credit card portfolios remain challenging for these specialized lenders due to their revolving nature and scale requirements.

5. Multiple Bidders Create Leverage: By maintaining relationships with Chase, American Express, Synchrony, and Capital One simultaneously, Apple ensured competitive tension and better terms in the final agreement.

Looking Ahead

As Chase prepares to take over the Apple Card program, the financial services industry will be watching closely. The partnership represents a major expansion of Chase's credit card empire and a test of whether a traditional bank can successfully manage a tech-forward card designed with Apple's user experience standards.

For Goldman Sachs, the transition marks the end of a costly experiment in consumer banking that ultimately didn't align with the firm's core strengths. The bank has already begun scaling back its consumer lending operations, and the Apple Card exit is part of a broader strategic retreat from the mass-market consumer finance space.

For Apple, the Chase partnership offers a fresh start with a bank that has the scale, technology, and risk management expertise to potentially grow the Apple Card program sustainably. However, the company will need to balance its growth ambitions with the realities of responsible lending to avoid repeating the portfolio quality issues that plagued the Goldman relationship.

The Apple Card story is a reminder that even the most successful technology companies face challenges when they venture into highly regulated industries like banking. The "unhappy marriage" between Apple and Goldman Sachs may have ended, but the lessons from their partnership will influence platform-banking collaborations for years to come.