
	March 31, 2023		June 30, 2022
Gross amount of acquired card receivables	$	444,709	$	261,806
Less: allowance for credit losses	(13,595)		(5,414)
Total	$	431,114	$	256,392

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, 2023, approximately $194.1 million of the acquired card receivable balance served as collateral for the Company’s borrowings from the Revolving Credit Facility (see Note 7).

The Company incurred losses related to card transactions disputed by spending businesses. The amounts were not material during the three and nine months ended March 31, 2023 and 2022.

The acquired card receivable balances above do not include purchases of card receivables from the Issuing Banks that have not cleared at the end of the reporting period. Purchases of card receivables that have not cleared as of March 31, 2023 totaled $64.3 million. The Company recognized an immaterial amount of expected credit losses on the purchased card receivables that have not cleared yet as of March 31, 2023 and 2022 (see Note 12).

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 uses 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, 2023		June 30, 2022
Current and less than 30 days past due	$	436,792	$	257,618
30 ~ 59 days past due	2,812		1,677
60 ~ 89 days past due	2,962		1,199
90 ~ 119 days past due	1,858		1,186
Over 119 days past due	285		126
Total	$	444,709	$	261,806

As part of its collection efforts, the Company may modify card receivables terms with spending businesses that defaulted on payments; such modifications may include principal forgiveness, late fee forgiveness, and/or an extension of payment terms. The following table provides additional information with respect to card receivables that were modified during the three and nine months ended March 31, 2023 (in thousands):


	Three Months Ended March 31, 2023		Nine Months Ended March 31, 2023
Principal subject to forgiveness(1)	$	—	$	81
Principal subject to late fee forgiveness(1)	—		696
Other-than-insignificant payment delay(2)	—		2,439
Payment term extension(3)	836		1,412
Total card receivables	$	836	$	4,628

(2) Other-than-insignificant payment delay represents accounts that are allowed to utilize available credit despite being delinquent outside of standard policy.

Outstanding and modified card receivables as of March 31, 2023 subject to modification were not material. Defaulted payments on card receivables during three and nine months ended March 31, 2023 that were previously modified within the last 12 months were not material. Upon the Company's determination that a modified card receivable (or a portion of the card receivable) has subsequently been deemed uncollectible, the card receivable balance and allowance for credit losses are adjusted for the uncollectible portion.


	Three Months Ended March 31,				Nine Months Ended March 31,
	2023		2022		2023		2022
Balance, beginning	$	11,948	$	4,607	$	5,414	$	1,740
Initial allowance for credit losses on purchased card receivables with credit deterioration	—		1		10		311
Provision for expected credit losses	8,425		6,085		23,529		15,310
Charge-off amounts	(7,155)		(5,774)		(16,568)		(13,070)
Recoveries collected	377		481		1,210		1,109
Balance, end of period	$	13,595	$	5,400	$	13,595	$	5,400

Card receivables acquired from the Issuing Banks and held for investment were $3.4 billion and $9.4 billion during the three and nine months ended March 31, 2023, respectively, and $1.7 billion and $4.4 billion during the three and nine months ended March 31, 2022, respectively. The allowance for credit losses related to acquired card receivables increased during the three and nine months ended March 31, 2023 due to portfolio growth.

Gross charge-off amounts for the nine months ended March 31, 2023 consisted of $10.1 million that originated in the year ended June 30, 2022 and $6.5 million originated in the nine months ended March 31, 2023.

The Company previously sold a portion of acquired card receivables to a Purchasing Bank at a discount. Effective August 2022, the Company ceased selling acquired card receivables.

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, were zero and $8.7 million as of March 31, 2023 and June 30, 2022, respectively.

•the financial asset is isolated from the transferor and its consolidated affiliates as well as its creditors, even in bankruptcy or other receivership;

The card receivables that the Company transferred to the Purchasing Bank during the nine months ended March 31, 2023 and the 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.

Under the agreement with the Purchasing Bank, the Company had a continuing involvement as servicer. Effective August 2022, the Company ceased selling acquired card receivables. The outstanding transferred card receivable balance as of March 31, 2023 and June 30, 2022 was zero and $57.3 million, respectively. The fair value of the beneficial interest derivative, which is included in prepaid expenses and other current assets in the accompanying condensed consolidated balance sheets, was zero and immaterial as of March 31, 2023 and June 30, 2022, respectively. The servicing fee income was zero and not material during the three and nine months ended March 31, 2023 and 2022.

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,
	2023 (1)		2022		2023 (1)		2022
Initial fair value of consideration received:
Cash	$	—	$	394,497	$	316,477	$	1,019,704
Beneficial interest derivative	—		1,100		1,682		3,387
Total	$	—	$	395,597	$	318,159	$	1,023,091