Goldman Sachs Apple Card loss rate on credit loans is among the worst in the US

The investment bank is now hoping Apple can reinvent debt relief.

Technology stories can range from the sublime to the absurd. This one will probably fall into the latter category. On Monday, it was reported that Goldman Sachs’ loss rate on credit card loans had climbed to 2.93% in the second quarter of 2022, which is the worst among major US card issuers. One might ask, “What does this have to do with technology? The answer to that lies in the reason for Goldman Sachs’ troubles and it’s because of one of the company’s biggest recent efforts: the Apple Card.

According to a CNBC Report, Goldman Sachs has attracted a large following primarily due to the Apple Card and its lax approval requirements. There are more than 14 million Apple Card users who have racked up $16 billion in debt, a figure the report says is expected to reach $30 billion by 2024. Given that Apple Cards appear to be going to almost everyone, the number of overdue payments increased significantly, leading to the aforementioned loss rate of 2.93%.

The Apple Card was one of the highlights of the March 2019 Apple Special Event. CEO Tim Cook cited the card as a way to leverage Apple’s huge install base to get started in the world of credit cards. Cook said the card would not have late fees, international fees, overage fees or annual fees. Combine that with one of the lowest interest rates around and you’ll begin to see why Goldman Sachs might be in trouble. It should be noted, however, that despite these issues, the Goldman Sachs Apple Card has tops JD Power’s U.S. credit card satisfaction survey for second consecutive yearas the investment bank takes a big financial hit, the Apple Card remains squarely on people’s radars.

Pay contactless with an Apple Card using an iPhone
Source: Apple

While Goldman Sachs had no trouble getting the Apple Card into the hands of consumers, the low redemption rate, despite low national unemployment, led to a tough time for the financial company. Right now, the Apple Card is in the red, and predictions that Goldman Sachs won’t achieve profitability are starting to come true. The moral of the story is that reinventing the credit card is harder than it looks. We’ll continue to watch these stories and other tech here at Shacknews, so keep them here for any updates.

Senior Writer

Ozzie has been playing video games since he picked up his first NES controller when he was 5 years old. Since then, he has taken an interest in games, only stepping away briefly during his college years. But he was retired after spending years in quality assurance circles for THQ and Activision, mostly spending time helping push the Guitar Hero series to its peak. Ozzie has become a huge fan of platformers, puzzle games, shooters, and RPGs, to name a few genres, but he’s also a huge sucker for anything with a good, compelling narrative behind it. Because what are video games if you can’t enjoy a good story with a fresh Cherry Coke?

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