Personal Finance News
Goldman Sachs Reportedly Selling GM Credit Card to Barclays
Goldman Sachs is reportedly nearing a deal to offload its General Motors credit card portfolio to a bank they previously beat out for the program.
About the reported deal:
According to Bloomberg, Goldman Sachs is close to sealing a deal with Barclays to take over their GM credit card business. While the agreement has yet to be finalized, the transaction will apparently cost Barclays the value of the outstanding card balances, which is said to be around $2 billion.
As the article notes, the GM portfolio was previously with Capital One. However, Goldman Sachs paid a premium to secure the co-branded card rights in 2021 — beating out Barclays in the bidding process. The My GM Rewards Card launched under Goldman’s Marcus brand in early 2022.
This move to offload the GM card comes after Apple announced plans to end its partnership with Goldman Sachs. Apple’s statement, which was made in November of last year, stated that they intended to end their contract within 12 to 15 months. Meanwhile, Goldman has also been discontinuing other parts of its consumer-facing products, including Marcus Invest. Those former accounts were transferred to Betterment.
About the My GM Rewards card:
With the My GM Rewards Card, customers can earn 7x points on GM purchases. Additionally, all other purchases made with the card earn 4 points per dollar spent. These points can then be redeemed (at a value of 1¢ each) toward the purchase or lease of a new General Motors vehicle. Alternatively, points can also be used for GM Certified Service and other GM purchases.
In terms of perks, cardholders can enjoy a $50 allowance per calendar year when using their card for vehicle detailing at participating GM dealerships. The My GM Rewards Card also doesn’t charge any foreign transaction fees or annual fees. Plus, customers can select one of five card designs: Chevrolet, Cadillac, Buick, GMC, or GM.
Even though the card may be changing hands, new applicants can still earn a welcome bonus. Currently, new My GM Rewards Card customers can earn 15,000 bonus points after spending $1,000 in their first three months.
My thoughts:
Clearly Goldman’s foray into consumer banking has been a bust. Now, selling off the card portfolio at a discount to a competitor you previously outbid for the prodcut has to add insult to injury. It’ll definitely be interesting to see if this deal ends up going through — and what happens with the Apple Card as well.
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