JPMorgan Chase is reportedly in advanced talks to take over the Apple Card program from Goldman Sachs.

Sources close to the matter indicate that Apple has expressed a preference for JPMorgan as the new issuer, though no formal agreement has been reached and negotiations still face unresolved issues.

The current balance of the Apple Card program totals approximately USD 20 billion under Goldman Sachs. The discussions between Apple and JPMorgan began early in 2023, with other potential partners like American Express, Capital One, and Synchrony Financial also being considered over the past two years.

High Subprime Exposure Poses a Key Risk

A major challenge in the transfer process is the credit quality of Apple Card’s portfolio. About 34% of Goldman Sachs’ credit card balances as of March were associated with borrowers having credit scores below 660, categorized as subprime. In contrast, JPMorgan’s subprime exposure is around 15%, while Capital One, known for its subprime lending, holds about 31% in this category.

The relatively high delinquency rate on Goldman Sachs’ credit card accounts also contributes to caution. By the end of March, roughly 4% of balances were at least 30 days overdue, compared to an average of 3.05% across commercial banks according to Federal Reserve data. As a result, Goldman had set aside USD 2.45 billion to cover potential credit card losses by the end of the first quarter.

Additionally, the structure of the Apple Card presents profitability challenges because it does not charge late fees—a common revenue source for issuers managing riskier portfolios. This has made the program less attractive to some potential partners unless acquired at a significant discount.

Separately, there is ongoing competition between card networks. According to MSN reports, Visa has offered Apple a payment of about USD 100 million to displace Mastercard as the card’s network provider, although no final decision has been announced.