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Pay Down High-Interest-Rate Debt

Eliminate the debt that is costing you the most

Why it’s important

You can reduce your total debt faster and pay less on interest and fees by using a pay down strategy.

It’s helpful to make a list of all your debt amounts and interest rates. You’ll get the most financial reward by paying down your highest-interest-rate debt first, such as credit cards. That’s because the higher the interest rate, the more money you’re charged in borrowing fees.

By targeting this debt, and paying it off in full first, you’ll reduce the total amount you owe faster. You’ll also free up money to put toward savings, or paying down your next debt. Use this approach to pay down accounts with the highest interest rates, one by one, while still making regular payments on the rest — more than the minimum amount if you are able.

What you can do: Simple steps for managing debt

While repaying your debt can often feel challenging, creating a plan to manage your payments and balances can help. Here are three small steps you can take today to make managing your debt easier.

1. Pay more than the minimum. Pay off your debt and save significantly on interest over time by paying more than the minimum every month. For example, if you have a $10,000 loan with a 7% annual percentage rate, and you paid $198 a month, you’d be able to pay off your debt in 5 years. But if you were to increase your payment by just $40 a month, you could pay off your debt in 4 years, save $376 in interest payments, and be debt-free a year earlier.

2. Pay your credit card bills more than the required once per month. This can make it easier to stay on track of how much you owe. As an added bonus, paying your credit card bill regularly can lower your utilization rate which is a key factor in how your credit score is calculated.

3. Set up payment reminders and recurring payments. Stay on top of your debt by setting up automatic payments with Bill Pay — it’s easy to do and will help reduce your debt in no time.

  • Set up alerts to monitor your accounts, including reminders about upcoming bill dates.
  • If you already have a Wells Fargo checking or credit account, simply sign on to Wells Fargo Online® Bill Pay to set up recurring payments.
  • If you don't already bank with Wells Fargo, check out how you can become a customer and use online banking to help you pay your bills on time, every time using Wells Fargo Online Bill Pay.


Keeping your credit utilization rate below 30% may help you maximize your credit score.

Calculate your debt-to-income ratio

Measure a key factor in your overall credit health. Use our calculator to determine your debt to income ratio.

Calculate your DTI