The Apple Card is breaking ties with its issuing bank, Goldman Sachs, the Wall Street Journal reported Tuesday. The tech company and bank began a partnership in 2019 to bring consumers the Apple Card, and more recently, Apple’s high-yield savings account.
According to the report, Apple sent Goldman Sachs a proposal to exit their contract within the next 12 to 15 months. The report cites that the partnership has been rocky due to increased scrutiny by federal regulators, greater customer service demands and low profits. Reuters also reported Goldman Sachs’ 2023 Q3 profits fell by 33%, in part due to losses in consumer lending.
What happens next if you’re an Apple card user or have an Apple high-yield savings account? It’s important to know that no deal has been finalized. Right now, there is only a report that Apple has proposed exiting its relationship with Goldman Sachs. However, if the departure does go through, a new issuing bank will take Goldman Sachs’ place. If this happens, Apple Card holders and Apple high-yield savings customers may see some big changes.
What is a credit card’s issuing bank?
The issuing bank is the financial backing of the card. It’s (usually) separate from the card’s payment network. It’s the financial institution that’s extending you the line of credit. It’s also the bank that handles your payments and customer service issues, provides rewards and some card perks, as well as sets credit limits and interest rates.
What happens when a credit card changes issuers
It’s not unheard of for credit cards to change issuers. It happens more often with co-branded credit cards than standard credit cards. If you’re a cardholder and your issuer changes, you’ll likely receive a notice in the mail detailing the changes, either from your current issuer or whichever institution is taking over the card.
This could mean your card will have a new interest rate, rewards and perks. If there are any major changes to your card terms, the issuing bank -- Goldman Sachs -- must typically provide 45 days’ notice of changes, according to the Consumer Finance Protection Bureau. And since the Wall Street Journal report notes a 12- to 15-month timeline, your account may not undergo major changes any time soon.
Since the Apple Card is a co-branded credit card, if a new issuer does take over, your rewards should remain with the brand (in this case, Apple) rather than with the previous issuer, according to the credit bureau Experian. That means any card rewards you’ve earned should transfer over to your new account. But if you’re concerned, you could use your rewards before the change takes effect.
Will I get to keep my card?
When a new bank takes over your account, you’ll likely receive a new Apple card in the mail. If that’s the case, you’ll have to activate the card and set up an account with the new credit card issuer. It’s a bit of an inconvenience, but confirming your new account typically requires a quick phone call or online account creation.
Will my card perks change?
If a new issuing bank takes over, it’s possible your card benefits will change along with the issuing bank. However, the card issuer doesn’t determine all of the card perks -- the card’s network, like Visa or Mastercard, also has a say.
When you receive your new card, it should come with a benefits guide that details all of your card features. You’ll also be able to find your card’s benefits online once you create your new account.
Does a new issuer mean I’ll have to reapply for the card?
No. You won’t need to fill out another application or undergo another hard credit check. You’ll simply receive notice of your new issuer and of any card terms that change, get your new card in the mail, and create a new online account.
Will my credit card interest rate go up?
It’s possible, but hard to know right now. One of the factors set by a credit card’s issuing bank is the interest rate. That means it is possible for your card’s annual percentage rate, or APR, to increase with a new issuing bank.
However, one of the Apple Card’s main marketing points is that it carries a lower interest rate than other credit cards (though really, sitting at 19.24% to 29.49% variable is pretty much on par with most other options) it’s possible the tech company makes an effort to keep them from changing too much.
What does it mean for my payments?
When you set up your new account, you’ll start paying the new issuing bank instead of Goldman Sachs. To reduce hiccups in the process, consider turning on automatic payments or payment alerts. That way, you’ll never miss a credit card payment and can avoid any headaches that come with it.
What will happen to my Apple savings account?
If the proposed exit goes through, Apple’s high-yield savings account will also be looking for a new home. It’s possible Apple’s savings account will go to the same issuing bank that takes over the Apple Card.
In the meantime, your money is still protected by the Federal Deposit Insurance Corporation for up to $250,000 per account holder and account type. But if you decide you want to move your funds, there are other high-yield savings accounts available that offer higher interest on your money.
CNET reached out to Apple for comment and has not yet received a response. We’ll update this story if we receive one.
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