Contrary to the common perception of users paying off balances monthly ("transactors"), the majority—about 60%—are "revolvers" who carry debt. This group is the primary source of profit for card issuers, as they are subject to interest rates now averaging a staggering 23%.

Apple insisted all card statements be sent on the first of the month to enhance customer experience. This forced Goldman Sachs to staff a massive, costly customer service team that was overwhelmed at the start of the month and idle for the remainder, unlike the staggered billing used by other banks.

While many assume high credit card rates cover default risk, actual charge-offs on revolving balances average only 5.75%. This is a significant cost but accounts for less than a third of the typical interest rate spread, indicating that other factors like risk premiums and operating costs are major drivers.

Steve Jobs' vision of Apple as an inclusive brand conflicted with the necessary exclusivity of credit risk assessment. This led to lower underwriting standards (credit scores around 600) for the Apple Card, contributing to its poor performance and eventual sale by Goldman Sachs at a discount.

A surprisingly large portion of high credit card APRs covers operating expenses, particularly marketing. Issuers like Amex and Capital One spend billions annually on customer acquisition. This spending is passed directly to consumers, as higher marketing budgets correlate with higher chargeable rates.

An early version of the Apple Card proposed "iPoints" redeemable exclusively for 99¢ songs on iTunes. While economically brilliant for Apple (capturing a 30% margin on redemptions), this closed ecosystem was less appealing than cash back or travel and would have become obsolete with the rise of streaming music.

In its rush to acquire fintech Frank, JPMorgan signed an agreement obligating it to pay the founder's legal fees—even for litigation related to her own fraud against JPM. This expensive oversight highlights how even sophisticated players can miss critical terms in fast-moving markets, with disastrous financial consequences.

The consumer partnership with Apple represented less than 5% of Goldman Sachs's revenue but received disproportionate negative attention. The leadership team made the tough call to exit because the strategic distraction and damage to the firm's narrative outweighed its actual financial impact.

Affirm's CEO argues the core flaw of credit cards is not high APRs, but a business model that profits from consumer mistakes. Lenders are incentivized by compounding interest and late fees, meaning they benefit when customers take longer to pay and stumble.