Ninth Circuit Court Upholds Bank of America's Variable Credit Card Rates

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The Ninth Circuit Court of Appeals has issued a unanimous decision in Milliken v. Bank of America N.A., upholding the legality of Bank of America's practice of tying variable credit card interest rates to public indexes like the U.S. Prime Rate. This ruling has significant implications for the future of credit card pricing and consumer protections under the CARD Act.

Why it matters

The Milliken decision validates the current system used by many credit card issuers to calculate variable APRs. This means consumers will likely continue to see their credit card rates fluctuate based on changes to benchmark indexes like the Prime Rate, LIBOR, and SOFR. While this can lead to lower rates when the indexes fall, it also exposes cardholders to potentially rapid rate increases when the indexes rise, as seen between 2022-2023.

The details

The case centered on whether Bank of America's method of calculating interest - adding a fixed margin to the Prime Rate - violated the Credit Card Accountability Responsibility and Disclosure (CARD) Act. The Ninth Circuit ruled that this practice is legal, as the CARD Act allows for increases on variable-rate cards linked to publicly available indexes outside the lender's control.

• The Ninth Circuit Court issued its unanimous decision in Milliken v. Bank of America N.A. in February 2026.
• The CARD Act was enacted in 2009 to protect consumers from predatory credit card practices.

What’s next

While the Milliken ruling is a win for Bank of America, consumer advocacy groups may continue to challenge practices they deem unfair, particularly regarding the application of rate changes to existing balances. Arguments focusing on transparency and clarity in cardholder agreements are likely to persist.