XML 34 R14.htm IDEA: XBRL DOCUMENT v3.24.2.u1
Acquired Card Receivables
 12 Months Ended
Jun. 30, 2024
Acquired Card Receivables [Abstract]  
Acquired Card Receivables ACQUIRED CARD RECEIVABLES
As of June 30, 2024, approximately $189.7 million of the acquired card receivables 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, 2024 and 2023.
The acquired card receivables balances do not include purchases of participation interest in card receivables from the Issuing Banks that have not cleared at the end of the reporting period. Purchases of participation interest in card receivables that have not cleared as of June 30, 2024 totaled $27.2 million. The Company recognized an immaterial amount of expected credit losses on the card receivables that have not cleared yet as of each of June 30, 2024 and 2023 (see Note 15).
Credit Quality Information
The Company regularly reviews collection experience, delinquencies, and net charge-offs in determining allowance for expected 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,
20242023
Current and less than 30 days past due$706,026 $463,704 
30 ~ 59 days past due4,277 2,507 
60 ~ 89 days past due3,393 4,544 
90 ~ 119 days past due4,093 3,196 
Over 120 days past due310 197 
Total$718,099 $474,148 
Allowance for Expected Credit Losses
Below is a summary of the changes in allowance for expected credit losses (in thousands):
June 30,
20242023
Balance, beginning
$15,498 $5,414 
Initial allowance for expected credit losses on purchased card receivables with credit deterioration
— 10 
Provision for expected credit losses52,327 32,015 
Charge-off amounts(51,805)(24,120)
Recoveries collected4,863 2,179 
Balance, ending
$20,883 $15,498 
Purchases of acquired card receivables from the Issuing Banks that were held for investment during the years ended June 30, 2024 and 2023 were $17.6 billion and $13.2 billion, respectively. The provision for expected credit losses related to acquired card receivables and charged-off amounts increased during the year
ended June 30, 2024 due to portfolio growth and an increase in delinquencies during fiscal 2024 on accounts, which were subsequently charged off prior to June 30, 2024.