It May Be Easier to Get Approved for the Apple Card Than You Think

Apple’s shiny new titanium credit card has all of the earmarks of an elite product for the rich and famous, from the premium design of the card itself to Apple’s partnership with Goldman Sachs, the investment bank that’s always been more associated with Wall Street power brokers than everyday consumers.

Despite this, however, it looks like it won’t be as hard to get approved for the Apple Card as you may think. A new report by CNBC reveals that with the debut of the new credit card, Goldman is actually dipping into “subprime lending” by accepting users with poorer credit scores.

As the financial powerhouse behind the credit card, Goldman is actually the entity responsible for approving credit applications, but according to sources with inside knowledge, it’s casting a very wide net, approving applicants with credit scores that normally wouldn’t qualify for such a seemingly-prestigious card.

When I heard it was with Goldman Sachs, I figured they were going for the high-income set.

Ed Oswald, new Apple Card customer

One new Apple Card customer cited in the report, Ed Oswald, a copywriter from Reading, Pennsylvania, was approved with a FICO score of only 620, adding that he was “absolutely shocked” by the approval, despite his lower score and outstanding collections from years past when he suffered financial difficulty. While Oswald said he only received a “relatively modest” credit limit of $750, and an interest rate of 23.99% — which is at the top of the Apple Card interest tier — he said that interest rate was still “a lot lower” than on his other cards, such as the subprime card he had been using from Merrick Bank.

While banks have different definitions as to what constitutes a “subprime” applicant, most use a baseline FICO score of 660. However, despite Goldman’s high profile, the move into subprime isn’t unprecedented; 13% of the $4.75 billion in personal loans made by its Marcus online consumer bank have also gone to borrowers with FICO scores below the 660 threshold.

Steve Jobs Vision

Nonetheless, it’s a move that’s surprised a lot of people, and it seems that we can thank Apple’s influence and Steve Jobs’ original vision for the Apple Card.

While the Apple Card has come to fruition in a way that Steve Jobs probably never would have dreamed of, it was actually his idea originally, and he approached Capital One with it back in the 1990s about creating a joint, Apple-branded card. At the time, however, he also made it clear that he wanted to reach as many people as possible, and “had an aversion” to the idea that any of Apple’s customers would be rejected for the card, since that ran against the grain of Apple’s consumer-friendly image.

In building its partnership with Goldman Sachs, modern day Apple has carried along that vision, insisting that Goldman approve as many of its 100 million-plus U.S. iPhone users as possible in order to provide a good user experience for its customers and maintain its positive image. In short, Apple doesn’t want to be the kind of company that says “no”, although it obviously still needs to stay within the realm of regulations and responsible lending.

Responsibility is Key

As we’ve already seen with the management features integrated into Apple’s Wallet app, one of the goals of the Apple Card is to encourage responsible use. For example, Apple is pushing very hard to help users avoid paying interest by showing them how to optimize payments and pay off their balance over time.

So naturally Goldman and Apple aren’t about to enable users to get in over their heads, and sources have made it clear that Goldman won’t provide more credit to a person than they can handle. However, its mandate to attract a broad customer base means that users are more likely to qualify for an Apple Card than they would for other popular rewards cards from competitors like J.P. Morgan or Citigroup.

Apple began sending out invitations to early adopters to apply for the Apple Card this week, and is said to still be on track for a full public release in the U.S. later this month. Users will be able to apply directly within the iOS 12.4 Wallet app and based on what we’ve seen so far, most users will receive an approval so quickly that they’ll be able to start using the card via Apple Pay within two or three minutes of completing their application.