Goldman Sachs bank is seeking another company to take over its GM credit cards as it attempts to exit consumer lending entirely, after expenses rose too high to make the attempted expansion of its business viable.
The bank wants to transfer its GM credit card and Apple credit card services to a different lender, the Wall Street Journal reports, after selling off the personal loan business it added to its holdings in 2022 with the purchase of GreenSky.
So far, the most likely buyer for both the Apple credit card and the GM credit card appears to be American Express. However, public details are lacking at this point other than the bare fact Goldman Sachs has communicated with Amex about the cards, so the ultimate fate of both card services remains unknown.
In the case of GM card services, Goldman Sachs has noted that car dealerships seem to make little effort to induce their customers to use The General’s card. This is despite the fact that the credit cards were mostly offered to GM vehicle buyers and owners in the first place.
The cards provided points rewards redeemable for discounts on a new vehicle purchase. Credit card users earned 5 percent on the first $5,000 worth of net purchases and 2 percent thereafter, with non-expiring points and no annual fee.
The bank originally showed interest in acquiring the automaker’s credit card services back in the second half of 2020. Goldman Sachs, Barclays, and several other banks competed to pick up the company’s card as the original contract with Capital One started counting down its final 12 months, with the previous issuer uninterested in continuing to support the card.
In the event, the car company ended up selling its credit card to Goldman for $2.5 billion in October 2020, possibly in response to disruptions caused to credit spending by the COVID-19 pandemic. The new issuer offered 7x reward points for purchases of General Motors products and services and 4x points on non-General Motors purchases. A survey by Goldman found almost 70 percent of credit card users target purchases on their cards to earn rewards points, depending on how rewards are offered.
Now, as it prepares to divest itself of the GM credit card, Goldman Sachs assured employees of the service it will continue to operate the card until a purchaser is found. If the employees are terminated, they will receive severance equal to a full year of their current salary.
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Comments
Wow that was a short period. I’ve had one since 92. They are running out of service providers. Cap One ran it for quite awhile and forget who preceded them. When these first started in 92, it was pretty new to get a bonus for using a card. Now there are numerous cash back deals which I think most find more attractive. The deal is not as good either. My card is grandfathered and gives me 5% up to 10K per year or 500/yr and they can be rolled for up to 7 years for a max of 3500. And so far they have always been applicable, even with heavy discounts & rebates on the deal already.
It was HSBC prior to Capital One.
Anyone remember the GM Debit Card offered by BofA?
I have saved over $5k buying new GM Cars by using the cards.
Original holder since ’92 also. I use it for almost everything and plan to cash in some points on a vehicle when the market returns to a more normal price structure.
What a hassle this was in ’20 because GS didn’t handle the transition well. Now we have to go through this AGAIN? UGH.
I agree the transition to Goldman was a disaster, it was obvious Goldman was new to credit cards and understaffed. Assuming AMEX of another large credit card issuer buys this the transition should be better this time.
Goldman sachs customer service is terrible.
I don’t have a gm credit card, but I do have a bunch of rewards points. Does anyone know if dealers are beholden to cash them in for a discount on a new vehicle, or can they opt out on a whim?
No dealer is required to honor it just like any other incentive(totally different from a rebate), but most mainstream dealers(non-rural) will honor/accept it(bare in mind 99% of the sales & service advisors and 65% of managers don’t know it can be used as an incentive towards the deal or parts/service).
1pt = $0.01
Thanks, that’s awesome. I can get $131.00 off a brand new gm vehicle!
What does Goldman expect? Look at the reward structure. 5% on the first $5000, 2% thereafter. Of course everyone quits using the card upon reaching $5000 worth of purchases. Upon reaching $5000, everyone is switching to some other card that did the same silly thing with their reward structure.
I have a GM card. Just started using it again in Nov. as the yearly window just reset. Once I hit the reward drop-off early 2024, the card will go back into my wallet unused until Nov. 24. All my purchases will be made with cards that do better than their meh 2%.
Card holder since 1994 so I am grandfathered, too (no cap). Points do start expiring though after like 5 years? Used the points several times for news cars. The issue is I haven’t bought a gm vehicle since 2014 and have no idea when next purchase will be? Sadly there is nothing from gm that really motivates me to make a purchase. Now Camaro is gone. Been using BJs Card and getting points monthly off my bill. Customers aren’t using gm Card because they aren’t looking to purchase a gm automobile.
Goldman Sachs is going away from Credit cards in general… It is also offloading it’s Credit Card with Apple to American Express.
And that is terrible, because the Apple Card customer service is fantastic. Well if you have an iPhone and are willing to text customer service instead of speaking with someone on a telephone.
I like it even better than Amex, and that’s saying a lot.
That’s not the reward structure at all. That was the reward on the Capital One BuyPower card. The MyRewards card is a 4% anywhere and 7% in a dealership or with OnStar or whatever. There is no limit anymore. A buddy of mine just redeemed like $34k off a Silverado.
Coolest part of the current card is that you can use points on your monthly bill if you have GM Financial. Even if you don’t need to get a new car. Goldman is very clearly inexperienced and doesn’t treat customers well at all. A new bank will be better.
Good riddance. Goldman’s customer service has been atrocious. Whoever structured this card was an absolute idiot. 4% back unlimited for every purchase, 7% for GM service?! In addition to the credit card network fee that runs about 1-2% and sign up bonuses, no wonder Goldman was losing money. Hope Amex takes it over.
The bank doesn’t really pay for points. And why is the structure stupid? GM is already giving MyRewards members 3%. That’s something they’re already doing. So it’s really just 4% extra. Which is good, but not crazy.
If Goldman is losing money, it’s because they don’t know how to treat customers. Their customer service is pretty bad. People say the Apple Card customer service is good which is true. But that’s because Apple runs every aspect of that card. The only thing Goldman does is underwrite. Goldman was so desperate to jump into consumer lending, that they saw Apple as the absolute pinnacle of retail partners. “If they have apple, they must be awesome.” They thought partners would line up so far, they were willing to take a loss on that partnership. They gave up control of pretty much everything. They’re losing money because they don’t know anything about customers and their strategy was to take a loss on Apple (both fiscally AND operationally) to acquire new partners, but decided too late not to get more partners.
GM Card holder since 2000. I’ve used it several times. I enjoy it best when I tell the salesman that I will be my credit to further reduce the deal, in my favor. LOL …like it’s coming out of their pocket!
As far as customer service, Goldman Sachs has been the worse and I have considered dropping the card because of them. I would like to go back to HSBC, maybe US Bank. AMEX is too hard to use these days.
Yes. LOL. It’s always fun working out the deal and the whipping out the GM card and saying, by the way, I have $3000+ in GM rewards to apply to this purchase.
I have used GM credit on new car purchase numerous times, ranging from $2500 to $3500 depending on how much credit was build up. Last purchase was Chevy Trax, with $3100 credit. But now I do not want to get locked into the GM brand, so the card remains in my drawer.
oh nice. after GS (well marcus) bought it, it took me 4 months to set up my accounts with them. cant wait to see what bottom feeder they will sell to next.
ps. cards have netted me great discounts on new GM vehicles so well worth
“In the case of GM card services, Goldman Sachs has noted that car dealerships seem to make little effort to induce their customers to use The General’s card. This is despite the fact that the credit cards were mostly offered to GM vehicle buyers and owners in the first place.”
I sell cars, I don’t care about Goldman Sach’s and their credit card business. Pay me one percent of every purchase and I will sell it.
Seriously? If you are really a salesman at a General Motors dealership and don’t want to take 30 seconds to communicate some thing to promote future sales at your dealership, you should be fired on the spot. I have purchased 9 new GMC and Chevrolet trucks in the last 20 years and couldn’t be happier with them. But in all honesty, if it weren’t for the incentives, I would be driving an F150.
Marcus/ G.S. is horrible. The refunds have never shown on the online accounts. I suspect there are reasons they are selling to minimize liability from improper handling of customers. Marcus has denied a small increase of credit line ( by $1000) because payment history changed. Typically pay off monthly or $2 or $3000/mo. One month made $30? Dollar payment over minimum. I only use it for points. I just paid for purchase instead of using their card. Will be glad to see them go.
Marcus customer service is terrible, unblocking accounts takes forever, ive given up my cc thru them, have had MC forever. GS ruined the card. Looking to replace, I’m not an Amex fan either. Cap. one is a good company.