Following extensive deliberations and speculation, JPMorgan Chase has agreed to take over Apple’s $20 billion credit card portfolio from Goldman Sachs.

Benefits for All Parties

This deal advantages all parties. For Goldman Sachs, it signifies the conclusion of a challenging venture into consumer lending and a return to its core business domain. For JPMorgan Chase, acquiring a significant credit portfolio at a discount while bolstering ties with one of the world’s premier tech firms is beneficial. For Apple, placing its credit operations in the hands of an experienced consumer lender is advantageous.

The issue here was that Apple wished everyone who owned a phone also had a card,” commented Brian Riley, Director of Credit and Co-Head of Payments at Javelin Strategy & Research. Goldman Sachs agreed temporarily but then issues arose, resulting in substantial credit write-offs, forcing Goldman to exit this business segment. An investment bank attempting retail operations didn’t align with its culture.”

Preparing for Transition

To mitigate potential risks, JPMorgan will record a $2.2 billion provision for credit losses during its Q4 2025 earnings reporting period. As the largest lender in the U.S., and soon to be more significant with this acquisition, Chase is well-equipped to navigate this transition, estimated to span about two years.

For Chase, it’s a positive move,” Riley stated. While it won’t attract millions of new customers—Chase already serves half of U.S. households—it will introduce some advanced technology and offer a platform for reaching younger demographics. However, the most important aspect is the increased transaction volume by 10%, which is crucial.”

The acquisition comes with a $1 billion discount, reflecting the portfolio’s higher proportion of subprime and less-qualified borrowers.

Chase follows stringent lending standards, as appropriate for America’s largest bank,” Riley noted. They won’t retain Goldman Sachs’ criteria. Expect stricter, bank-level lending policies to ensure stability.”

Notably, in the past, Chase has demonstrated flexibility with its Chase Rise card, easing underwriting requirements when customers open a checking account. The rationale is that individuals who regularly use a checking account are more likely to establish long-term stable relationships.

Risk Management and Strategy

Despite potential risks, Chase can address them systematically. They can close underperforming accounts,” Riley suggested. As they analyze the portfolio, there will be areas for growth and decline. Systematic action without emotional ties to past operations is key.”

While cleaning up Apple’s portfolio requires considerable effort from JPMorgan, these efforts are already factored into the deal.

Typically, such deals come with a premium,” Riley explained. This one comes at a discount, indicating portfolio instability. It will take years to fully integrate this, but it aligns with Chase’s capabilities.”