Does a DMP close all of my credit card accounts?

In most cases, yes. And that's actually a feature, not a bug.

When you enroll in a DMP, the creditors who agree to reduce your interest rate typically require that the account be closed to new purchases as a condition of the concession. They're giving you a break on interest. In return, they want assurance you're not adding new charges while paying down the balance.

This concerns people because closing credit cards reduces your total available credit, which increases your credit utilization ratio and can lower your credit score in the short term. That's a real trade-off. If you have $30,000 in available credit across three cards and close all three, your available credit drops to zero (excluding any cards not in the DMP), and utilization-based scoring takes a hit.

But here's the context: if you're enrolling in a DMP, your credit cards are likely already maxed out or close to it. Your utilization ratio is already terrible. The closing of accounts in this scenario has a smaller impact than people fear because utilization was already sky-high.

Can you keep one card out of the DMP? Sometimes. Some counseling agencies allow you to keep one credit card outside the plan for emergencies. It won't get the reduced interest rate, but you'll have it available. Ask about this during your counseling session. The answer varies by agency and by which creditors are involved.

The accounts are closed, not deleted. Your payment history on those cards stays on your credit report. The accounts show as "closed" but the positive payment history remains. And as the DMP reduces your balances over time, your overall debt-to-income ratio improves, which helps your credit in other ways.

Most people who complete a DMP find their credit score is equal to or higher than when they started, despite the closed accounts. The combination of on-time payments, zero late fees, and shrinking balances more than compensates for the reduced available credit.