I was in the same spot you are in last year, but I went ahead and applied to both MA and PHD programs. I naturally was rejected from a number of PHD programs, but surprisingly got an interview and wait-listed at my top school, Johns Hopkins with a cGPA of 3.26 and a dept GPA of 3.66 at UT Austin and mediocre GRE scores. I also got into my top choice MA with a full (90%) funding offer. So, if you're worried you won't into a PHD program because YOU don't think you're qualified, then that's not the way to go. My advice is to let the program decide if they think you're ready. You might surprise yourself.