Apple CEO Tim Cook denied Apple credit card, here's why
What's the story
Tim Cook, the big boss of Apple, decided to test out the brand-new Apple Card before it hit the market in August 2019.
However, his application for the card was rejected! Yes, you heard that right.
The CEO of Apple couldn't get approval for the credit card created by his own company.
Four sources confirmed the amusing incident in The Information's report.
Reason
Denied due to impersonation risks
Cook, whose net worth is valued by Forbes at $2 billion, was denied because his public profile makes him a target for impersonation, and credit bureaus flag the accounts of famous people like him, according to the tech news outlet.
However, Goldman Sachs, Apple's underwriting partner, later made a one-off exception to grant Cook a card, The Information said.
Souring relations
The souring relations between Apple and Goldman Sachs
Ever since the Apple Card was launched in October 2019, there have been some issues with the partnership between Goldman Sachs and Apple.
According to reports, Goldman Sachs is considering ending the partnership because the profits from the Apple Card have been lower than they expected in the short term.
People close to the situation shared this information with the news outlet.
Revenue losses
Why are their relations souring?
When they first teamed up, the economic conditions were favorable, and interest rates were low.
At that time, Goldman agreed not to charge certain credit card fees, like the interchange fee paid by merchants for accepting the Apple Card.
However, this decision caused them to lose revenue.
As a result, it became challenging for Goldman to handle the rising costs associated with the partnership.
Card's design
Dispute over card's design
Goldman Sachs even blamed the Apple Card for losses of at least $1 billion.
The two companies also had disagreements over the design of the card.
While Goldman wanted the card to carry the logo of their consumer banking division called Marcus, it ended up featuring only the Apple logo on the front and the logos of Goldman Sachs and Mastercard on the back.
American Expressway
Goldman trying to offload the deal to American Express
Goldman Sachs is going to great lengths to end the deal, and there are claims that they might even try to transfer the partnership to American Express.
However, Apple has the authority to block any such move by Goldman, as per sources.
It's also not likely that American Express will be part of the deal because Apple's credit card payments go through Mastercard's network.