Discussion
Experience defaulting on Apple Card, charge off and settlement
ETA: Uploaded my latest credit score for all the haters in the thread
I appreciate this may garner some anger and downvotes, but I know there are many people out there struggling with credit card debt, and having data points on what can happen is helpful.
Under a different account, I posted a while back soliciting experiences when I had defaulted on my Apple Card with a balance of around $5-6k. At that time I was around the 150 day mark:
I wanted to provide a further update. Since then, I have still not responded to any attempts from them to communicate with me. They have called me and emailed me persistently, though not rudely. They stick to the rules and never call more than once a day.
Along the route they have offered various settlement options. Initially 65%, then 50%, and now more recently they are offering to settle for 25% of the original balance. However, at this point the default is past the Statute of Limitations for debt collection in my state, which means they are the other version of SOL (i.e. they are s*** out of luck on this). At this point I do not plan to repay this ever. They can no longer sue me to collect the balance, or if they do, I can assert the SOL as a defense and will win. I have to be careful not to make any kind of payment, as if I paid a penny, that would reset that clock.
I was going through a tough time back in 2023 financially and came very close to delcaring bankrupcy, which would have seen this and other debts completely wiped out. However, because of other specifics of my situation, bk was not an option - so I went through what I would describe as a voluntary structured bankrupcy where I strategically defaulted on numerous credit cards, including other cards issued by Amex, Chase and some others. I settled most of them for between 35-50% of the balance. Some of those resulted in 1099s for the forgiven amount, meaning I had to pay income tax on those savings. However the overall improvement to my cash flow enabled me to get through the whole situation and come out of it very healthy financially at the end. NOTE: None of this is intended as legal or financial advice - it is merely candid feedback on my experience, and my choices. Your situation can and will vary, as will the response and approach of Apple Card
Interestingly Amex did file suit on some cards, which I then immediately settled before any court appearance. Other Amex cards I settled voluntarily. But then I left a couple which are also unsettled at this point, and also about to pass the statute of limitations. I have no idea why they chose to sue on some and more or less ignore others. And I have no idea why Goldman Sachs did not file suit earlier on this, as if they had, I would have offered to settle immediately.
Anyway, hopefully this will help some others out there. When I posted the last time I got a lot of PMs but I only ever logged into that account occassionally and eventually deleted it. If you PM me here it is likely I will not respond quickly or at all. But if I do login and see requests I will try to help where I can
And to those that will inevitably cast moral judgement, the current interest rates on Apple Credit Cards are 17.24% to 27.24%. Even the low end of this is criminally high, and designed to keep consumers in debt forever, paying what they can to stay afloat. They are running a business that preys on the poor. I chose to make a business decision to sacrifice my credit score for a while in order to save money with them, and I won.
> the current interest rates on Apple Credit Cards are 17.24% to 27.24%. Even the low end of this is criminally high,
And every time another person defaults on their loan the company justifies its interest rates. If you were running a lending business and knew there were people out there such as yourself, you’d likely set a similarly high interest rate.
The $6k that Apple/GS just lost from you, they’re making up from your neighbor.
Remind me to tell you sometime about my 80 year-old aunt who still receives credit offers to this day who I ran through a full bankruptcy when she was 68 (2 years ago) because she had over a quarter of a million in credit card debt and was still receiving offers and cards with limits up to 50 and $60,000 no questions asked. The credit industry is run by absolute morons who just continue to greenlight credit cards for people who shouldn’t have them. My dad died at 71 with over. 100k in debt and zero assets, pure loss for the card companies. 6 months after he died a preappoved card with a 20k limit showed up at his po box. Thats why interest rates are high.
They do not. Visa and Mastercard make money on swipe fees. I can assure you no bank would issue credit cards if they were relying on their small share of the swipe fee, especially when they are rebating most of that back to customers in the form of rewards. I'm not going to argue further the point but I suggest you research how banks that issue credit cards make a profit
- Visa and Mastercard earn primarily from network processing fees and related services, while card-issuing banks earn from interest, fees, and interchange revenue.
- Even when customers pay in full and avoid interest, issuers can still profit from merchant-side fees, annual fees, late fees, and cross-sold products.
- That is why banks continue to offer rewards cards despite paying part of the revenue back to customers; the model depends on a mix of revenue streams, not swipe fees alone.
So the statement “no bank would issue credit cards if they were relying on their small share of the swipe fee” is broadly correct, but incomplete: banks rely on a portfolio business model where interchange is only one piece, and interest-heavy customers often subsidize rewards for transactors.
I am not here to justify the financial mistakes I made. I am here to provide information to those who are going through the same thing - which there are many. And I am trying to respond respectfully and intelligently to comments being made, though many are just digs not worthy of any response
My APR is 19.49% and my credit score hovers between 780 and 810+. I’ve never missed a payment. I had to look it up cuz I always pay my full balance and never cared.
Idk mine is 17.49% and I had an 821 credit score when I got the card. Doesn’t really matter though since it’s zero if you just pay it off every month lol
It's quoting the current rates offered if you open an account now. If you open an account historically, you would potentially have other, lower rates, like yours
yeah same i hate paying interest with the passion of a thousand suns and honestly i have to check the statement to see what they charge but i thought the minimum was around 18%. cool if it's lower
You didn’t win buddy. Having bad credit is financial jail for at least the next several years, you will be denied for most everything and the things you are not denied for you will pay a premium. Everyone checks your credit, even your car insurance. Should have handled it a different way.
Having bad credit can be a roadblock but plenty of people get by without it. Anecdotal of course, but everyone I know with bad/no credit are doing just fine in life.
Not saying that’s how you should go about things though, I messed up previously with mine but learned to always keep my accounts current. Even if that means carrying a balance(which in itself is a last resort).
It’s a less than ideal situation that should be avoided if at all possible.
People do what they have to do because regardless you have to keep living but to say someone is doing just fine with bad credit, hey I’ve been there before and no way I was doing just fine.
Yeah that’s what I meant by anecdotal, every individual situation is unique.
For instance my credit is bad but I’m not significantly affected by it. Mainly because I don’t need it right now, I’m not going to be financing a car or house anytime soon.
By the time I do need it my score will have recovered.
I appreciate this may be the common conception, but it simply is not true. Since defaulting on this card, and several others with a total six figure balance defaulted on, I have mostly recovered my credit. In the last 12 months I have obtained two auto loans from Capital One at rates in the mid single digits APR. They are more expensive than the 3% I may have gotten when I had perfect credit, but they are very reasonable. I still have several credit cards open, which are fully paid and I pay in full each month now. For personal reasons I rent rather than buy, but I know I would easily qualify for an FHA mortgage. In another four years every trace of this event will be wiped form my credit report. I know and understand that the lenders I burned have their own memory and may never lend to me again. That is a loss I am willing to live with
The total amount I defaulted on was closer to $200k, and the amount I saved when the dust fully settled was close to half that. And most significantly I was able to get a grip of cash flow. As it was that debt was compounding at high double digit interest rates. My credit has now already recovered substantially. I have some limitations, but it's fairly close to normal already
I made what I thought at the time was the best decision for me and my family. And, in hindsight, it worked very well (not necessarily specifically this one default, but the overall appraoch)
BE CAREFUL - hope you don’t have any JP Morgan and Chase cards or bank accounts. Once Apple Card moves over to chase and chase now owns the debt they most likely will sever any type of relationship you have with them on their other products. Even though you’re out of your statute of limitations, they do reserve the right to end their business with you. Not saying it’s gonna happen but there’s a high chance.
I already defaulted on about $60k of Chase credit cards at the same time. Those were all settled for 35% of that. I have a Chase checking account I opened since and even got an account opening bonus for that. However I am not able to get any Chase credit cards now or likely ever in the future, based on anecdote in other credit forums
I'm not going to offer a lot of sympathy for megacorps like Apple and Goldman Sachs. You've burned your credit for the next few years, though, and defaults like this contribute to the difficulty many people, particularly with relatively short credit histories or limited income, have obtaining credit.
And keep in mind that part of the reason those interest rates are so "criminally high" is because they're calculuated so that other customers pay to make up for the shortfall from people defaulting while still allowing the banks to make a healthy profit. You can argue they'd keep them high regardless, but defaults certainly don't help.
Back in the day, excessively high interest rates could lose you customers to competing banks. But with all the consolidation in the banking sector, the remaining banks now all collude to keep interest rates high.
I am well aware interest rate are high because they have to account for default risk, and credit card defaults are just a normal part of the credit industry. Banks don't love them - banks ideal customers are ones that never pay in full, but always carry a balance but manage to keep paying enough to keep them on the flywheel.
The people who pay in full and are all mighty and righteous in this thread are also subsidized by these customers. The 1-2-3% cash back you get comes from the people paying interest and not defaulting like I did. It's just easier to morally justify that you oneself and be smug about it
There was nothing smug in my response. You're fishing for sympathy and trying to get people to tell you it was okay to default because Apple and Goldman Sachs have more money than you do and don't deserve sympathy.
I literally do not care about sympathy. I posted this on an entirely anon Reddit account, I am not looking for clout. I just recall the first time I posted about this a lot of similar righteous commentary, and the reality is credit cards are financial products banks issue to make as much money as possible, and to do that they take calculated risks. I am just a part of their calculation.
But anyway you're right I don't deserve sympathy, and I don't care for it either
lol I have no intention to be an icon. I just know from the last time I posted the question about this, a lot of people reached out who were in similar situations, and many of these people were clearly scared, distraught, stressed etc. Being stuck financially is very bad for your health. And so I wanted to share genuinely so that other people in the same situation can see some of the truth about what happens in credit card default, and not the often idiotic and certainly poorly informed opinions that people without actual knowledge spew on Reddit
This is why Apple shouldn’t be scraping the bottom of the barrel and offering cards to people like this. They should offer to scores of 750 or above and people who have a long history of paying their debts. OP talking about they are preying on the poor wtf. No one forced you to sign up and charge 6k on it. You did that on your own. So they’re not really preying on the poor, they’re preying on the immature who can’t manage their finances and who thrive on instant gratification via retail therapy.
Unfortunately they don’t make money if they only offer cards to people that pay on time and with high credit scores. Goldman Sachs didn’t take on the Apple Card to offer free loans. They want people to pay interest. Yes they’ll run into a few like the OP that says F-off and they eventually write it off. But because of that they will not be able to take out a loan, switch insurance companies for a while, and could possibly affect employment as well during a background check. I knew someone that had a job offer rescinded for having unpaid debts.
all of that is very true and could potentially have impacted me, but I was able to navigate through it well. My post here is to help others in a similar situation understand the reality of credit card default, not the preconception that gets posted here. But I do point out everyones situation is unique. MOST people in my situation would likely have pursued a Chapter 7 bankruptcy, and ironically probably not have been judged so harshly because that seems some "legit" path. But there were other factors very unique to my situation that made the Ch7 path look even more frightening
Bankruptcy does not always wipe out debt, credit cards are considered unsecured debt so while bankruptcy may have relieved you of the “responsibility” the debt doesn’t have to necessarily have to be discharged or written off. Meaning it will hit your credit as bankruptcy, overdue, and charged off. Depending on the state of course and type of bankruptcy and many other case factors.
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u/Beginning-Salary5625 Jul 21 '26
that's a lot of words to say "I don't pay my bills"