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Apple and Goldman Sachs, two of America’s premier high-end brands, are in the subprime lending business.

Both companies want to cast a wide net for their new consumer products, making lending and tracking payments dead-simple. To do that, Apple needs to offer its first credit card to as many of its customers as possible. Goldman needs to open its doors to customers it typically doesn’t serve.

As the new Apple Card begins to roll out, some of its first members have no credit history or below-average credit scores.

“Goldman was willing to take a little bit of a risk here. They’re the ones taking the credit risk, they’re also the ones losing out on fees,” said industry analyst Ted Rossman. “All these things are adding up to a card that’s probably not going to make Goldman a whole lot of money.”

“For them, the motivation is getting deeper into consumer finance,” said Rossman.

Apple published a support article Wednesday that sheds light on how people with low credit scores can still get approved for the Apple Card if they meet other criteria.

Goldman Sachs (FADXX), the card issuer, looks at conditions including a customer’s history of debt payments, amount of debt, age of credit accounts, amount of loan accounts, credit utilization and any history of foreclosures, bankruptcies and debt sent to collectors, the article said.

It’s Goldman’s latest foray into the retail consumer business after establishing its online Marcus brand in 2016. Marcus makes unsecured personal loans, including to consumers who are dealing with credit card debt.

Apple randomly selected some of the hundreds of thousands of people who had signed up to be notified when the Apple Card became available to apply for the card. Goldman began reviewing their card applications on August 6.

Goldman is serious about becoming a bank for everyday people. The company has lent $4.75 billion out in personal loans through Marcus and 13% of those loans have gone to customers with FICO scores below 660, which is roughly the definition of a subprime borrower. The company has signaled big ambitions for Marcus especially as it has looked to compensate for lower revenues from its trading arm.

Yet some analysts believe the Apple Card may not be that big of a risk for Goldman.

The card has no sign-up bonus or fees besides the variable interest charged when a balance is unpaid. It charges 12.99% to 23.99% interest rate, which is below industry averages, and offers 3% cash back on Apple products, 2% on any Apple Pay purchases and 1% on all other purchases.

Nomura analysts predicted in a new report Wednesday that it would take Goldman Sachs four years to break even on an Apple Card customer, assuming it took $350 to acquire the customer and that person spent $5,000 a year with an 18.5% APR. The analysts wrote that Apple’s desire to “approve as many iPhone customers as possible effectively puts [Goldman Sachs] in a position of having to approve applications to individuals with below average credit ratings.”


Ben Rasmussen, 28, from Elk, Washington, who works in a restaurant and at a pet store, told CNN Business he was approved for the Apple Card despite having a low credit score of 524 and an estimated income of $15,500 a year. Goldman approved him for a $250 credit limit with a 23.99% APR.

“[I] was kind of nervous to apply at first when I got the invite,” said Rasmussen. “Figured I didn’t have much of a chance, especially with it going through a bank like Goldman Sachs.”

Rasmussen said he has only had one credit card in the past, which he used to finance a car. He said in the past, he missed three months of car payments and that damaged his credit. But he hopes to build it back up with his new Apple Card.

The new card is unlikely to “make a big dent in Goldman’s financial position or even its public image,” said Lawrence J. White, economics professor at New York University Stern School of Business. “There would have to be a lot of defaulting on the debt before this can become a big problem for Goldman and it doesn’t appear that that’s where they are going.”

White said that Goldman was figuring out who among those with poor credit histories or no histories “appear to be good risks.”

Another new Apple Card owner, Jordan Osterberg, 18, is a college student and a part-time software engineer at a local church in California. He told CNN Business he was “quite surprised” when he was accepted. Goldman approved him for a $250 credit limit with a 12.99% APR. Osterberg said he has no credit score yet and the Apple credit card is his first one, although he banks with a credit union.

“I’ve known for a while that I need to build credit, and with Apple releasing a credit card, it seemed like a perfect opportunity to get that ball rolling,” said Osterberg.

CNN Business’ Chris Isidore contributed to this report.