Acquired card receivables consisted of the following as of the dates presented (in thousands):


	March 31,			June 30,
	2022			2021
Gross amount of acquired card receivables	$	242,911		$	148,833
Less: allowance for credit losses		(5,400	)		(1,740	)
Total	$	237,511		$	147,093

Certain lines of credit and acquired card receivable balances are collateralized by cash deposits held by the Issuing Banks. Before an account is charged off, the Company obtains any available cash collateral from the Issuing Banks.

As of March 31, 2022, approximately $192 million of the acquired card receivable balance served as collateral for the Company’s borrowings from the 2021 Revolving Credit Agreement and the 2019 Credit Agreement (see Note 9).

The Company regularly reviews collection experience, delinquencies, and net charge-offs in determining allowance for credit losses related to acquired card receivables. Historical collections rates have shown that days past due is the primary indicator of the likelihood of loss. The Company elected to use the delinquency trends or past due status of the acquired card receivables as the credit quality indicator. Acquired card receivables are considered past due if full payment is not received on the bill date or within a grace period, which is generally limited to five days. Below is a summary of the acquired card receivables by class (i.e., past due status) as of the dates presented (in thousands):


	March 31,		June 30,
	2022		2021
Current and less than 30 days past due	$	237,847	$	145,993
30 ~ 59 days past due		1,773		1,188
60 ~ 89 days past due		1,613		580
90 ~ 119 days past due		1,583		713
Over 119 days past due		95		359
Total	$	242,911	$	148,833

The amount of outstanding balance of acquired card receivables that is (i) 90 days or more past due that continue to accrue fees and have an allowance for outstanding balance and fees, and (ii) classified as nonperforming was not material as of March 31, 2022.

Below is a summary of the changes in allowance for credit losses for the periods presented (in thousands):


	Three months ended March 31,			Nine months ended March 31,
	2022			2022
Balance, beginning	$	4,607		$	1,740
Initial allowance for credit losses on purchased card receivables with credit deterioration		1			311
Provision for expected credit losses		6,085			15,310
Charge-off amounts		(5,774	)		(13,070	)
Recoveries collected		481			1,109
Balance, end of period	$	5,400		$	5,400

The Company also incurred losses related to card transactions disputed by spending businesses. The amount was not material during the three and nine months ended March 31, 2022.

A financial asset acquired is considered a purchased credit deteriorated (PCD) asset if, as of the acquisition date, such financial asset has experienced a more-than-insignificant deterioration in credit quality since origination. The Company used certain indicators, such as the past due status and charge-off status of the balances, in identifying and assessing whether the acquired card receivables are considered PCD assets.

The acquired card receivables that were considered PCD assets were not material during the three and nine months ended March 31, 2022.

The Company sells a portion of acquired card receivables to a Purchasing Bank at a discount. Card receivables held for sale, which are carried at the lower of cost or estimated market value at the individual user account level and included in prepaid expenses and other current assets in the accompanying condensed consolidated balance sheets, amounted to $6.7 million and $2.6 million as of March 31, 2022 and June 30, 2021.

Card Receivables Sold and Related Servicing and Beneficial Interest Derivative Retained

The Company accounts for the transfer of card receivables as a sale if all of the following conditions are met:

The card receivables that the Company transferred to the Purchasing Bank during the three and nine months ended March 31, 2022 met all of the requirements described above; therefore, the Company accounted for the transfer as a sale of financial assets. Accordingly, the Company measures gain or loss on the sales of financial assets as the net proceeds less the carrying amount of the card receivables sold. The net proceeds represent the fair value of any assets obtained or liabilities incurred as part of the transfer, including, but not limited to, servicing assets, servicing liabilities, or beneficial interest derivatives.

The Company has an agreement with the Purchasing Bank to sell its acquired card receivables. The Company has continuing involvement under this agreement as servicer, and by retaining a beneficial interest derivative in the form of a deferred purchase price. The beneficial interest derivative represents the Company’s right to receive a portion of collections based on the performance of each cohort of card receivables sold to the Purchasing Bank. The fair value of the beneficial interest derivative was $1.8 million and $2.3 million as of March 31, 2022 and June 30, 2021, respectively, and is included in prepaid expenses and other current assets in the accompanying condensed consolidated balance sheets. The servicing fee income was not material during the three and nine months ended March 31, 2022. The initial fair value of the beneficial interest derivative includes key inputs and assumptions that qualify as Level 3 inputs in the fair value hierarchy including discount rates and delinquency rates. See Note 4 for additional information about the fair value measurement of the beneficial interest derivative as of March 31, 2022 and June 30, 2021.

Below is a summary of the fair value of consideration received from the transfer of card receivables accounted for as a sale during the periods presented (in thousands):


	Three months ended March 31,		Nine months ended March 31,
	2022		2022
Initial fair value of consideration received:
Cash	$	394,497	$	1,019,704
Beneficial interest derivative		1,100		3,387
Total	$	395,597	$	1,023,091

The Company could experience losses on the beneficial interest derivative if the performance of the cohorts of card receivables sold to the Purchasing Bank is less than expected. The Company could also experience losses on card receivables sold if it were required to repurchase delinquent receivables due to a breach in representations and warranties associated with its sales of receivables.

Card receivable repurchases during the three and nine months ended March 31, 2022 were not material.

Below is a summary of outstanding transferred card receivables by class (i.e., past due status) that have not been charged-off and have not been recorded on the Company's condensed consolidated balance sheets, but with which the Company has a continuing involvement through its servicing agreements, as of the periods presented (in thousands):


	March 31,		June 30,
	2022		2021
Current and less than 30 days past due	$	60,772	$	27,763
30 ~ 59 days past due		397		240
60 ~ 89 days past due		802		165
90 ~ 119 days past due		437		301
Over 119 days past due		44		132
Total	$	62,452	$	28,601

The difference between the outstanding balance of transferred card receivables as of March 31, 2022 and June 30, 2021 and the amount derecognized for which the Company has a continuing involvement as servicer as of March 31, 2022 and June 30, 2021 was not material.