Citigroup's (NYSE:C) marketing team must think I'm stupid. "We are making changes to your account terms. These changes include an increase in the variable APR for purchases to 23.99%," reads a note from the company that I received last week.

But that's not the worst part. This is:

As a valued customer, you have the ability to earn a special rate that is below your current purchase rate if you accept these changes.

The bold text isn't mine. Citi included that in the letter it sent. So you'd think the offer to follow would be pretty sweet, right? Wrong. The terms are:

  • Transfer $3,000 or more by Dec. 10.
  • Receive a special rate of 9.99% on this balance transfer until Jan. 1, 2011. (Technically below my current "purchase rate.")
  • In addition, effective Dec. 20, the "special rate" becomes effective on all existing and new purchase balances until Jan. 1, 2011.
  • After that, the rate increases to 23.99% for all unpaid balances.
  • Oh, and there's a 3% balance transfer fee.

And you call me a "valued customer," Citi? Geez. How about you just steal some beer from my fridge instead? Maybe kick my imaginary cat? Egg the house? Anything other than this whopper of a rotten deal.

The non-offer offer
What's most troubling about this so-called offer is that it isn't really an offer at all. Rather, it shows a striking lack of attention. We don't carry a balance on this card. We never have. Instead, we use it to charge a modest number of business expenses each month, earning Hilton HHonors rewards points for each purchase.

Citi, in effect, is offering me an interest rate I don't need and won't use. Nothing of consequence, which means I'm no more a "valued customer" than my 4-year-old son.

So why did this presumably top-drawer bank waste the postage? I posed the question to two of the Fool's top banking analysts, Morgan Housel and Matt Koppenheffer. You won't like their answers.

Living off the ignorant
"Citigroup knows exactly what it's doing here," Morgan says. "It works. People fall for this stuff hook, line, and sinker. It's a sad truth, but the majority of borrowers don't have the financial literacy skills to understand they're being hosed by a lender's offer."

Matt has a similar perspective. "In the end, the credit card industry really thrives off of people simply making bad decisions about their personal finances -- namely treating short-term revolving credit as longer-term financing," says Matt.

In other words, just like Bank of America (NYSE:BAC), JPMorgan Chase (NYSE:JPM), and Discover Financial (NYSE:DFS) do with their cards, Citigroup hopes you'll take the bait and become a profit generator for the bank.

My advice, though, is to stick it to lowball credit offers with awful terms by demanding more than they're offering, because better deals are out there. I grabbed one from American Express (NYSE:AXP) over the weekend.

Anatomy of a credit multibagger
Amex likes me, and for good reason. I've been a customer since 1991, and my wife and I charge the majority of our monthly expenses to our green card. We do this because (a) we've been in debt, and having a card that's due in full each month enforces ongoing spending discipline; and (b) Amex's Membership Rewards program helps us fund exotic vacations we wouldn't ordinarily be able to afford.

As of today, we no longer use the green card. We've upgraded to what American Express is calling the Premier Rewards Gold card. Why? Because, by my math, we're going to earn at least a 500% return on our incremental investment.

Barely a month old, the Premier Rewards Gold card offers double points on gas and groceries and triple points on travel. Those who spend more than $30,000 per year on the card earn a 15,000-point bonus that can buy a $150 gift card.

We'll pay Amex $50 more per year in fees. But we'll earn multiples of that. Between feeding three kids -- two whose food allergies demand regular trips to Whole Foods -- and daily commuting, we spend at least $1,000 per month in gas and groceries. Also, because we concentrate more than 50% of our monthly spending on Amex, we'll qualify for the year-end giveaway.

In short: We're spending $50 to get at least 27,000 extra points, which I calculate to be worth about $270 in rewards -- a five-bagger. From a credit card. Better than 23.99% interest and nothing, don't you think?

More good news
Of course, you don't need Amex to rescue you from bad banks. You can get MasterCard (NYSE:MA) and Visa (NYSE:V) cards from issuing banks offering 1% or more cash back. Some of them even carry no fees. Shop around, and chances are you'll find something far better than what your bank is offering.

Make your lender treat you like the "valued customer" it claims you are. It's the least you deserve.

To learn more about making the most of your credit, check out our credit collection.

Whole Foods is a Motley Fool Stock Advisor selection. American Express and Discover Financial are Motley Fool Inside Value picks. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers is a member of the market-beating Rule Breakers stock-picking team. He didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. The Fool's disclosure policy just checked the temperature outside. Brrrrrr!