Across the nation, Citibank credit card holders are receiving what pretty much amounts to a ransom note: We're going to raise your rates, says the letter, in so many words, but if you spend more money, we won't.

In more specific terms, customers are being asked to spend a minimum of $750 on their cards, and if they do, they can get a rebate for 50% to 100% of their interest rate for that given month.

I can't blame anyone for wanting to implode on the spot. After all, credit cards as a group used to encourage everyone to spend, until the recession came around, when the message seemed to be -- please don't spend, and if you spend, don't spend much. But now the credit cards are encouraging spending.

And if you don't, they'll raise your rates.

Madness.

But there's a reason behind it. Ben Woolsey, director of consumer research for CreditCards.com, told the Huffington Post that Citigroup, which is Citibank's parent company, by convincing people to spend more, will cause there to be more interchange fees -- those are the fees merchants have to pay every time a customer uses a credit or debit card. And so Citigroup will make more money through interchange fees, or through the higher interest rates.

About 71.5% of consumers will use cash, checks or debit cards this holiday season versus 28.3% who plan to use credit cards, which is about a 10% decrease from last year and a clear sign that consumers are weaning themselves away from credit cards.

As credit card interest rates climb along with credit card delinquency consumers clearly want to avoid digging an even deeper credit hole.

According to the National Retail Federation's 2009 Holiday Consumer Intentions and Actions Survey, U.S. consumers plan to spend an average of $682.74 on holiday-related shopping, a 3.2% drop from last year's $705.01. Only 28.3% of shoppers will use credit this year compared to 31.5% a year ago.

"Paying with cash is the best way to add a safety brake during holiday shopping. Studies show that consumers typically spend 12% to 18% less when we use cash for payment. Counting out and handing over cash is a sobering reminder of how much items really cost. It makes you pause and consider if the purchase is really worth your labor," Bill Hardekopf, CEO of LowCards.com and author of The Credit Card Guidebook, told me by e-mail.

Move over AA, NA and other 12-step programs, now there is Debtors Anonymous for those addicted to overspending. Patterned after Alcoholics Anonymous, DA is a 12-step program to help spenders recover from chronic debt and compulsive spending.

In DA, the first step for recovery is accurately tracking every dime, nickel and penny of spending for 90 days. The new DA member is then paired up with two or more veteran members who assist in formulating a new plan for spending and budgeting. The weekly meetings offer support and encouragement to members, particularly if there is a spending relapse.

In yet another sign that Americans are still cautious -- and growing more so -- about their spending, new research shows that fewer of us will be using credit cards to make our holiday purchases this year.

According to a survey conducted by BIGresearch for the National Retail Federation (as reported here by Reuters), the number of consumers using credit cards for holiday purchases will drop more than 10% this year. Only 28.3% of shoppers say they'll use credit cards to buy presents, down from 31.5% last year.

What are we doing instead? Paying cash. The number of survey respondents who said they'll be using cash to buy holiday gift this year rose by almost exactly the same percentage as the drop in credit-card users, at 9.1%. This is a step in the right direction for consumers, as more of us are making a conscious decision to live within our means.

It's bad news for the already-beleaguered credit-card industry, though; we've recently written about new data showing that credit-card companies will probably have many more defaults next year.

It's also bad news for the nation's retailers, which are already bracing for a weak holiday shopping season. The National Retail Federation survey also revealed that we're buying more practical gifts this year. A greater percentage of consumers plan to buy clothing this year, and fewer are buying electronics and jewelry.

A recent report shows that credit card charge-offs have dropped a bit from their highs, but delinquencies -- that is, payments more than 30 days overdue - are still on the rise.

This article from MSNBC says that spells continuing trouble for Americans' personal finances and our nation's still-shaky economic recovery.

While the drop in charge-offs -- meaning that the issuer writes off the amount owed as a loss -- was attributed to people funneling tax refunds into their credit card debt, the high and still rising level of unemployment triggered the growth in delinquent payments.

It used to be that you only had to worry about extraneous foreign usage fees from your credit card company when you set foot in a foreign country but; thanks to the Internet, you can waste money on foreign transaction fees from the comfort of your own home.

Last month I found out just how easy it is to tally up yet another fee on a credit card by purchasing a new part for our Kenmore dryer. After dealing with the cruel and unusual punishment that is Sears' customer support, which simply bounced me from automated menu to automated menu, I decided to take things into my own hands and find a replacement heater online.

How evil is the credit card industry these days? Pretty evil, I'd say.

I thought I'd call attention to The Business Insider, which has an amusing -- and unfortunately true -- story on the 10 ways credit cards can still screw you. Well, it's amusing, in the way that being run over by a car is amusing. Perhaps the people making up the credit card rules used to work in the waterboarding department of the defense department. That's my working theory, anyway.

This isn't quite the falling of the Berlin Wall, but in the credit scoring world, it's close. Apparently, for the first time ever, FICO, the company that has its famed credit scoring model, has released details on how a financial goof-up actually affects your credit score.

First, before I go on, credit for making credit scores a little less mysterious goes to Liz Pulliam Weston, a prolific and well respected columnist with MSN Money. She asked FICO for details on how they determine how late fees, bankruptcies, foreclosures and so on affect one's credit score, and they decided to actually be upfront about it. Or at least more upfront than they used to be.

Every time you make a financial mistake, these are known as "damage points." And the higher credit score, the more points these mistakes will cost you, which is interesting. In other words, the slide descending into bad credit can be faster and more pronounced than someone already on their way down.

Free range cash has several drawbacks. For the user, carrying a wad of cash can be hazardous; for banks, cash is cumbersome and offers no opportunity to charge interest; to the merchant, paying cash turns buyers annoyingly frugal; for the government, cash greases illicit business operations.

Credit and debit cards are better, but still require a physical item that can be stolen, scratched or altered.

In a digital age, therefore, you should expect a digital solution to transactions, and it looks like it might come in the form of the cell phone.

Even though the most recent consumer credit reports show credit card debt is declining, consumer's debit cards are getting quite a workout. Debit card transactions recently surpassed credit card transactions for the first time ever.

Banks continue to take advantage of the waiting period for the CARD Act to lower credit limits, increase interest rates, and raise the minimum credit scores required for a credit card during the past three months, according to the quarterly survey released this week by the Federal Reserve.

This survey of loan officers also found 75% of banks that make credit card loans do not expect to be compliant with the provisions of the legislation until February 2010, the month these reforms go into effect.

You can opt out of that insane credit card interest rate -- but be careful out there.

That's the premise of a clever article at CreditCards.com, which takes a unique look at opting out of your credit card. As Tamara E. Holmes points out, the Credit CARD Act of 2009 allows people to avoid higher payments by refusing to accept the new interest rate. But by opting out, you still have to pay the remaining balance, and your credit card is still active. And because of that, if you aren't careful and wind up making a purchase, your carefully protected interest rate could wind up shooting up to the one you opted out of.

It's a little like having a time bomb in your wallet.

Senate Banking Committee Chairman Chris Dodd unveiled his financial reform package on Tuesday and consumers could win big if the bill becomes law. Dodd proposes a strong Consumer Financial Protection Agency whose sole job will be to protect American consumers from fraud and abuse. He wants to be sure people get the clear information they need on loans and other financial products from credit card companies, mortgage brokers, banks and others.

Dodd introduced the bill along with fellow committee members Jack Reed, Charles Schumer, Robert Menendez, Daniel Akaka, Jon Tester, Mark Warner, Jeff Merkley and Michael Bennet -- all Democrats, so at least it looks as though this may be a partisan effort, but the issue is so important I hope it can become a bipartisan bill.

Black Friday can certainly net shoppers some great holiday gift deals. But if you're not careful, experts say those "deals" could wind up costing you big in the long run by damaging your credit score.

Steve Schwartz, executive vice president of consumer services at Intersections, Inc., in Chantilly, Virginia, told WalletPop that it's easy to get caught up in the adrenaline-filled rush of Black Friday shopping. "But without a plan," Schwartz says, "consumers frequently end up with buyer's remorse." And a plunging credit score, too.

We here at Walletpop have decried the rate-raising, fee-slapping tactics of the credit-card companies making one last grab at America's wallets before the new credit card reform legislation passed by Congress earlier this year goes into effect. Credit card companies' practices got so out of hand that the House of Representatives voted this week to put the changes into effect sooner.