Apple Card may reap $1.5 billion, be in top 10 card issuers by 2024

Apple Card may reap $1.5 billion in revenue and be in top 10 card issuers by 2024, resulting in a windfall not just for Goldman Sachs, but for the iPhone manufacturer as well, an HSBC analyst said in a Thursday memo.

The card has a "large potential captive market," HSBC's Nigel Fletcher argued in a note seen by AppleInsider, potentially as much as half of the estimated 146 million adults in Apple's U.S. install base. Net income from the card from interest is predicted to be as high has $300 million in the first year, he continued, and up to $1.5 billion five years from launch.

Assuming a 70/30 revenue split between Apple and Goldman Sachs, the investment bank could reap as much as $500 million before tax in the card's second year — 3.9 percent of what the firm is expected to generate as a whole in 2021.

Fletcher predicts that outstanding balances on Apple Cards could surpass $50 billion in five years, which would be enough to make Apple one of the country's 10 biggest credit card issuers.

Despite this optimism, the analyst is maintaining "hold" ratings on shares for both Apple and Goldman Sachs.

Perks of the Apple Card include same-day issuance handled entirely through an iPhone, "Daily Cash" rewards, and the elimination of any late, annual, or international fees. Apple is even planning a real-world titanium equivalent with minimal personal info.

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17 Comments

hucom2000 149 comments · 8 Years

About 5 years ago

So the 50 billion of (partly/mostly additional) consumer debt is now a thing to brag about?

So are 1.5 billion in excessive interest rates?

sportyguy209 70 comments · 17 Years

About 5 years ago

hucom2000 said:

So the 50 billion of (partly/mostly additional) consumer debt is now a thing to brag about?

So are 1.5 billion in excessive interest rates?

No, debt is nothing to brag about whether it be personal or governmental. But, I believe the Apple card is far more transparent than the usual bank issued card. So, I think it could really help out those who aren't as credit card aware as they should be. And, there are no fees which are often hidden by banks. All good!
I agree with the commentary that there are a lot of nice features about the card and I can't wait to get mine, but I have the same disappointments. For example, my wife is from Mexico, so she doesn't have credit yet (she is legal). Unfortunately, at this point, she can't use my credit/card. And, I'm disappointed that I can get $500 for signing up with a bank card but, nothing for Apple's card. I hope that will change. I'm also disappointed with the 3% cash back for Apple purchases. I can do better ordering Apple products by mail order and saving the sales tax.
That said, I found this announcement to be very exciting for the future growth of Apple and am surprised that the traditional financial pundits aren't raving about it. I see this as a huge revenue source for Apple going forward. And, it will force the banks to be more transparent if they want to compete.
This won't be my only credit "card," but I see it as a viable credit option going forward. Now any bets on how long it will be before Samsung copies the concept and comes out with their card. :-)

iOS_Guy80 856 comments · 5 Years

About 5 years ago

hucom2000 said:

So the 50 billion of (partly/mostly additional) consumer debt is now a thing to brag about?

So are 1.5 billion in excessive interest rates?

You wan’t to play (have a credit card) you better be willing to use it responsibly or you will pay. That holds true for any credit card.

flydog 1132 comments · 14 Years

About 5 years ago

hucom2000 said:

So the 50 billion of (partly/mostly additional) consumer debt is now a thing to brag about?

So are 1.5 billion in excessive interest rates?

I didn't see anywhere in the article or in the analyst's report stating that incurring debt was a good thing. You're manufacturing a controversy to rant about a personal agenda.

If you choose to incur debt then any negative consequences of that decision are on you, not Apple or Goldman Sachs. Credit cards can be used responsibly.

And in case you didn't realize this, a significant portion of credit card revenue comes from POS transaction fees.

iOS_Guy80 856 comments · 5 Years

About 5 years ago

flydog said:

hucom2000 said:

So the 50 billion of (partly/mostly additional) consumer debt is now a thing to brag about?

So are 1.5 billion in excessive interest rates?

I didn't see anywhere in the article or in the analyst's report stating that incurring debt was a good thing. You're manufacturing a controversy to rant about a personal agenda.

If you choose to incur debt then any negative consequences of that decision are on you, not Apple or Goldman Sachs. Credit cards can be used responsibly.

And in case you didn't realize this, a significant portion of credit card revenue comes from POS transaction fees.

Wonder how much of that consumer debt is due to buying more smartphone and data plans than you need?