How will the debt management program affect my credit?

If your credit report already reflects any late or missed payments, then the debt management plan (DMP) will likely improve your record by facilitating consistent, on-time monthly payments.
Also, if you were late in the past, many creditors will report you as "current" as long as you make all of your monthly DMP payments on time. If you have never missed a payment, then sending reduced payments to creditors or getting interest concessions through the DMP could put a blemish on your credit report. A creditor may report a reduced payment as "late" or reflect that payments are being administered by a credit counseling agency. Since the plan objective is to help you get out of debt, lenders may avoid issuing new credit cards until you have completed or withdrawn from the plan.

Can I still use my credit cards if I enroll in a debt management program?

The objective of debt management program is to get you out of debt as quickly as possible, so the creditors you put on the program will inactivate their accounts with you while at the same time granting you program benefits.

A great alternative to credit cards is a prepaid MasterCard, like the FreedomPoint 20/20™ Prepaid MasterCard® card. The 20/20 Card provides you with the convenience and security of MasterCard without the possibility of accruing debt or loss to the concessions of your debt management plan. Best of all, a prepaid card has no interest charges or late fees.

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