Why Money Experts Stand by This One Trick To Keep Credit Card Debt Under Control

Group 1: Debt Overview - As of Q2 2025, Americans' total debt has reached $1.2 trillion, marking a 5.87% increase from the previous year, driven by economic conditions, inflation, and consumer spending habits [1] Group 2: 20% Rule for Debt Management - The 20% rule suggests that individuals should keep long-term debt to no more than 20% of their annual income and short-term debt to no more than 10% of their monthly income, as explained by debt expert Jason Pack [2] - This budgeting method divides after-tax income into three categories: 50% for essential needs, 30% for discretionary spending, and 20% for financial goals, which can include savings or debt repayment [7] - The 20% rule helps manage credit card debt by allocating a portion of the budget specifically for debt repayment or savings, thus prioritizing savings on payday and preventing unnecessary spending [5]