
	June 30,
	2023		2022
Gross amount of acquired card receivables	$	474,148	$	261,806
Less: allowance for credit losses	(15,498)		(5,414)
Total	$	458,650	$	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 June 30, 2023, approximately $188.0 million of the acquired card receivable balance served as collateral for the Company’s borrowings from the Revolving Credit Facility (see Note 10).

The Company incurred losses related to card transactions disputed by spending businesses. The amounts were not material during each of the years ended June 30, 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 June 30, 2023 totaled $68.6 million. The Company recognized an immaterial amount of expected credit losses on the purchased card receivables that have not cleared yet as of each of June 30, 2023 and 2022 (see Note 15).

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):


	June 30,
	2023		2022
Current and less than 30 days past due	$	463,704	$	257,618
30 ~ 59 days past due	2,507		1,677
60 ~ 89 days past due	4,544		1,199
90 ~ 119 days past due	3,196		1,186
Over 119 days past due	197		126
Total	$	474,148	$	261,806

The amount of outstanding balance of acquired card receivables that is (i) 90 days or more past due that continue to accrue fees and has an allowance for outstanding balance and fees and (ii) classified as nonperforming was not material as of each of June 30, 2023 and 2022.

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. Total card receivables subject to such modifications were not material during the years ended June 30, 2023 and 2022. Outstanding and modified card receivables as of June 30, 2023 subject to modification 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.


	June 30,
	2023		2022
Balance, beginning	$	5,414	$	1,740
Initial allowance for credit losses on purchased card receivables with credit deterioration	10		313
Provision for expected credit losses	32,015		19,566
Charge-off amounts	(24,120)		(18,005)
Recoveries collected	2,179		1,800
Balance, ending	$	15,498	$	5,414

Card receivables acquired from the Issuing Banks and held for investment during the years ended June 30, 2023 and 2022 were $13.2 billion and $6.6 billion, respectively. The allowance for credit losses related to acquired card receivables increased during the year ended June 30, 2023 due to portfolio growth.

Gross charge-off amounts for the year ended June 30, 2023 consisted of $6.5 million that originated in the year ended June 30, 2022 and $17.6 million that originated in the year ended June 30, 2023.

The Company sells 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 based on pricing agreed upon with the purchasing bank plus an estimate of the deferred purchased card receivables held for sale, are included in prepaid expenses and other current assets in

•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 each of the years ended June 30, 2023 and 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 June 30, 2023 and 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 consolidated balance sheets, was zero and immaterial as of June 30, 2023 and 2022, respectively. The servicing fee income was not material during each of the years ended June 30, 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):


	Year ended June 30,
	2023(1)		2022
Initial fair value of consideration received:
Cash	$	316,477	$	1,483,481
Beneficial interest derivative	1,682		4,690
Total	$	318,159	$	1,488,171

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 consolidated balance sheets, but with which the Company has a continuing involvement through its servicing agreements, as of the dates

presented (in thousands):


	June 30,
	2023(1)		2022
Current and less than 30 days past due	$	—	$	56,162
30 ~ 59 days past due	—		292
60 ~ 89 days past due	—		375
90 ~ 119 days past due	—		422
Over 119 days past due	—		30
Total	$	—	$	57,281

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