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Considering a DMP with Cambridge Credit Counseling. – Joann

I currently owe about $21,000.00 between four credit cards.

I called Cambridge Credit Counseling and they are able to set up a plan with two of the four. Of the two that they couldn’t do anything with, one is zero interest so they left it out and the other wouldn’t deal.

They are able to substantially reduce my interest and I will have the two cards paid off in 57 months (the debt total on the two cards is currently about $10,000.00. The payment for the plan is about $5.00 more than the minimum payment for the two cards. I haven’t signed the paperwork yet.

Should I go with this? I can come up with the five extra dollars per month. Just looking for some advise from someone who might have some knowledge on the subject. Thanks!!!

Dear Joann,

There are a number of issues that I’d need to know to give you some clarity.

Since the monthly payment is about the same, is it just a change in interest rates that you are looking for? What was the reason you sought debt help and what is the goal you want to achieve by the end of your long journey to get out of debt?

Please post your responses and follow-up messages to me on this in the comments section below.

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About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • Joann

    I have decided to hold off on the DMP.  I may try for a home refi at a local credit union that is offering low rates.  If I qualify, I can get a 10 year mortgage with payments that will save me about 200.00 per month and pay off the higher interest cards.

  • Joann

    I’m really hesitant to go with the DMP.  I had $150.00 per paycheck going into a savings account for things like property taxes and oil bills in the winter and $20.00 per paycheck going into a vaction account.  I just reduced the amount to $100.00 per paycheck for savings and nothing into the vacation account giving me $70.00 more per paycheck.  I’m now thinking I will hold off on the DMP and trying the micro-payments.  If it doesn’t work out I can always go with the DMP or maybe will have more equity in my house and get a home equity loan or refi.  My mortgage will be paid off in about 8 years so I do hesitate to refi as I would love to have the house paid off and have that extra money every month.  Maybe this is the best approach right now?

    • Steve Rhode

      Take a look at the free payment prioritization service offered by to help you maximize your repayment.

      Another area to look for changes is if you get a big tax return every year you may be overwithholding each month when you need it most.

      Make sure you save at the same time you are trying to get out of debt. They are not mutually exclusive.

      • Joann

        Thank you.  I went to readyforzero and linked the accounts that would link (Barclaycard wouldn’t link but this apparently is common with them).  Even though I will be paying the higher interest than with the DMP I think this will be the better option for my credit.  Am I correct in this assumption?

      • Steve Rhode

        If you can afford to make the minimum payments it would have no negative impact on your credit. You would be repaying your debt without intervention and in accordance with the terms you agreed to with your creditors.

        The bigger issue is if the minimum payments are not affordable for you. If that’s the case we’d need to look at solutions that intervene but those will have some credit implications and that’s not a bad thing if it is needed.

      • Joann

        Are you saying the DMP would have no negative impact on my credit or the plan to pay on the cards on my own at the higher interest?  If the DMP has credit implications, what are they likely to be?

      • Steve Rhode
  • Joann

    I was hoping to get my payments down every month so that I can live on my income and not have to use the cards for things like gas and groceries. I also want to get these cards paid off and it’s not going to happen of I don’t do something.

    • Steve Rhode

      To get a payment reduction you are going to have to look at a debt consolidation loan, debt settlement, or a bankruptcy.

      Use the free How to Get Out of Debt Calculator to review the options, pros and cons.

      After that, come back here and comment about what seems to make the most sense and let’s discuss that.


      • Joann

        I did the calculator.  I would ideally like to get a debt consolodation loan but the payment on the loan would be too much higher than my monthly payment on my credit cards unless there are loans that will go beyond 60 months.  Perhaps a home equity loan?  Don’t know if I have enough equity in my house to get what I owe on the cards. It seems with the DMP, the payments will go up by $5.00 per month but the cards (two of them, anyway) will be paid off in 57 months.  The counselor from Cambridge sent me the documents but I haven’t signed them yet.  I would just be happy to find some sort of plan that would allow me to pay my bills off and leave me eonugh money from my paycheck so that I don’t have to use the cards for things like gas and groceries on the non-pay week.  The calculator seemed to indicate that deb consolodation loan or the micr payments option would be best.  Don’t know if I have enough money in my budget to do this.  I should mention that I am up to date on all of my payment and still have a decent credit score.

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