There are lots of financial vehicles out there that are dumb for most people. Universal Life Insurance comes to mind. But as I logged on to my mortgage company's website today, I see they are offering a credit card with points. The points don't go toward a new car or your alma mater, they go to reduce your mortgage. How dumb is this? "Because you borrow from us at 20% on your credit card, we going to help you pay down your 5% mortgage!".
Does this make financial sense to anyone? Sure I can come up with a bizarre scenario where the card is used for business and paid off every month and so someone wants to reduce their mortgage instead of get airline points, but that is a really small minority. Look how long it takes to get $500 in airline tickets, will this really do anything for your mortgage? Perhaps with ideas like this, loan sharking will make a comeback. After all, if a loan shark finally kills you, they don't go after your estate for the debt!