This is completely unsurprising. The way banks make money on consumer credit cards is primarily through interest and fees, which primarily take advantage of people who are not financially literate. They also make intentional dark UX choices to ensure that collecting on fees or interest is much more likely.
Meanwhile, Apple Card had such high eligibility requirements (I got denied the first time I applied and I'm a HENRY tech worker with an 812 credit score) that the vast majority of the customers in the program are exactly the type of people who are high earning and responsible enough with money to pay the card off each month to avoid interest and fees. Apple made it a step further due to the integration into Wallet that allows you to easily track spending and ensure you can trigger payments in a way to avoid interest.
As a consumer, I love Apple Card, because it makes it simple to get base cash back and ensure I never get charged interest. Clearly it's a bad deal for Goldman Sachs, but I don't have any tears to shed for them.
It is mostly older Millenials/Xennials with professional jobs. They earn more than 2x the national median income, but have a net worth that's less than 3x their income or $1M (whichever is larger).
Are the approval rates that harsh? It never seemed that way to me. Anecdote: I applied in 2019 when it first came out, and hadn't had a credit card in several years, and my credit score was, to my knowledge, pretty much shit and non-existent; the only reason I even tried to apply was because I had a good paying job at the time, and it was like 2 button clicks to try it, so I figured "why not, I should probably get one". I got approved for $250/month within 5 minutes and was able to use it via NFC at the store within 5 minutes of that. I was fairly surprised actually.
But you're otherwise spot on. Because I'm an American tech worker, I've never missed a payment the whole time I've had it, or even had to worry about it much. It's been great for my credit score and I've literally paid zero interest on it, ever.
Well, the limit is much higher now, I can tell you that, but that's only because I just never missed a payment for a few years. They expanded my limits pretty quickly. I mostly didn't use credit cards before that when I made less money (and was younger and dumber), so there wasn't much credit history. But then why approve me quickly to me if they only were giving me something that low in the first place?
FWIW, I knew several people who got approved around the same time, but only in the $800-$2000 range. I saw it as no harder or easier to get than an average card, I guess is my point.
It might have been first mover advantage, when it first launched. Or maybe it's one of those things where you can make it over the gate if you're in the far tail ends on the left or right, but if you're just in the middle of the road credit wise, it's easier to get denied? Credit scores and the like are mostly a bullshit mystery, in my opinion.
Your premise makes intuitive sense given what we've heard about Apple Card approval rates, but articles I read in the past indicate the problem is in fact high charge-off (failure to pay) rates:
Meanwhile, Apple Card had such high eligibility requirements (I got denied the first time I applied and I'm a HENRY tech worker with an 812 credit score) that the vast majority of the customers in the program are exactly the type of people who are high earning and responsible enough with money to pay the card off each month to avoid interest and fees. Apple made it a step further due to the integration into Wallet that allows you to easily track spending and ensure you can trigger payments in a way to avoid interest.
As a consumer, I love Apple Card, because it makes it simple to get base cash back and ensure I never get charged interest. Clearly it's a bad deal for Goldman Sachs, but I don't have any tears to shed for them.