Goldman Sachs is actively seeking a new company to take over its GM credit cards as part of its larger strategy to exit consumer lending. Existing MyGM Rewards cardholders can continue using their cards for spending and earning rewards while the company evaluates potential new partners.
GLOAs part of its strategic shirt away from the retail sector due to $3bn looses over last three years, Goldman Sachs is reportedly considering discontinuing its co-branded credit cards in partnership with General Motors.
In response, General Motors affirmed its commitment to rewarding customers for their loyalty to its brands. A spokesperson stated that existing MyGM Rewards cardholders can continue using their cards for spending and earning rewards while the company evaluates potential new partners.
Goldman Sachs is actively seeking a new company to take over its GM credit cards as part of its larger strategy to exit consumer lending due to rising expenses that have made its business expansion untenable. The bank is looking to transfer both its GM credit card and Apple credit card services to a different lender, with American Express appearing as the most likely buyer for both services, although details remain undisclosed.
Goldman Sachs had previously expanded its consumer lending business with the acquisition of GreenSky in 2022, but challenges prompted the sale of its personal loan business. The fate of the GM and Apple credit cards is still uncertain, but discussions with American Express have taken place.
In the case of GM credit card services, Goldman Sachs observed a lack of effort by car dealerships to encourage customers to use the GM card, even though it was initially offered to GM vehicle buyers and owners. The cards provided points rewards redeemable for discounts on new vehicle purchases. 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.
Despite the challenges, Goldman Sachs has assured that it will continue to operate the GM credit card until a new purchaser is secured, and employees will receive severance equal to a full year of their current salary if termination occurs. The bank initially acquired the GM credit card in October 2020 for $2.5 billion.
Source: GLO
