JPMorgan Chase is reportedly in advanced negotiations to take over Apple's credit card portfolio from Goldman Sachs, a move that could significantly expand its financial services and solidify its position as the largest credit card issuer in the United States. While a final agreement has not yet been signed, and negotiations could end without a deal, this potential acquisition represents a major shift in one of Apple's most high-profile financial partnerships.

Behind the potential acquisition

Goldman Sachs, which launched the Apple Card in 2019 in partnership with Mastercard, has been looking to exit the consumer credit space after facing complexities and incurring substantial losses. The Apple Card's unique structure, which includes no late fees and generous cashback rewards, has created profitability challenges for Goldman Sachs. Additionally, a significant portion of Goldman's Apple Card balances are held by subprime borrowers, leading to higher delinquency rates compared to the industry average. By the end of the first quarter of 2025, Goldman had allocated $2.45 billion to cover potential credit card losses.

Apple, seeking a more stable banking partner with greater operational discipline and reduced regulatory risk, has seemingly found a suitable candidate in JPMorgan Chase. JPMorgan already has a significant relationship with Apple, being one of the earliest Apple Pay partners, managing some of Apple's cash reserves, and serving as a major credit card transaction partner at Apple retail locations.

JPMorgan's strategic move

Acquiring the Apple Card portfolio, which currently holds approximately $20 billion in balances, would significantly expand JPMorgan's already dominant presence in the credit card market. Led by CEO Jamie Dimon, JPMorgan Chase issues a broad portfolio of branded and co-branded cards and leads the U.S. in purchase volume. The addition of the Apple Card would provide JPMorgan access to Apple's dedicated customer base, offering opportunities to cross-sell other financial products.

JPMorgan Chase aims to solidify its position as a leading global financial services firm by achieving sustainable growth and profitability. The company has set ambitious targets, including a goal to achieve $20 billion in annual revenue growth by 2025 and a commitment to maintaining a return on tangible common equity (ROTCE) of over 17%. JPMorgan Chase emphasizes enhancing customer experience and expanding its digital banking capabilities to drive future growth.

This potential acquisition aligns with JPMorgan's broader strategy of expanding its presence in the financial services sector. JPMorgan has been investing significantly in enhancing its digital platform to provide seamless online banking experiences for customers, including improving mobile banking capabilities and expanding digital payment solutions. JPMorgan is also expanding its affluent offering by opening new J.P. Morgan Financial Centers and continues expanding its presence in low-to-moderate income and rural communities.

Challenges and considerations

Despite the strategic advantages, the deal faces potential hurdles. JPMorgan is reportedly seeking changes to how the card is serviced and negotiating for service-related concessions before committing to the deal. The high concentration of subprime borrowers within the Apple Card portfolio is also affecting the price JPMorgan is willing to pay.

Approximately 34% of Goldman Sachs' credit-card balances as of March 2025 were tied to borrowers with credit scores below 660, which is classified as subprime. In contrast, JPMorgan's own subprime exposure stands at around 15%. As of the end of March 2025, around 4% of Apple Card balances were at least 30 days overdue, compared to a 3.05% average across commercial banks, based on Federal Reserve data.

JPMorgan is also mindful of the Apple Card's structure, which does not charge late fees, a typical revenue stream for card issuers managing higher-risk portfolios. The bank is reportedly negotiating a discounted price for the portfolio, reflecting concerns over subprime risk and operational complexity.

If the deal is finalized, it remains unclear whether there would be any major changes to the card's features and policies. It has been reported that Visa and American Express have expressed interest in taking over for Mastercard as the payment network behind the cards.