"I know exactly what I owe"

You'd say you're on top of it. You know roughly what's on each card. You know the minimums go out. You're not one of those people who doesn't open the statement.

Do the two lines, if you haven't. For every card, what's owed, the limit, the rate, the minimum, on one sheet. In my observation, people who say they know what they owe are usually within a few hundred pounds on the biggest card and don't know the rate on any of them, and have never added the owed column up. The total is the number that matters, and it's the one number the apps never show you, because each app shows you one card, in green.

Soll's finding from chapter 6 is that people misjudge what they owe in a particular direction. They think it'll be cleared sooner than it will, and that the payment needed to clear it is smaller than it is, especially while they're still using the card. The statement was redesigned in the United States to fix this and only partly did. The knowing you have is the knowing the statement gives you, and the statement is built to make the balance look manageable and the minimum look reasonable, and it does.

There's a related habit, which is not opening the statement at all, and an earlier book in this series is about the unopened letter and what it costs. The card statement is the commonest unopened letter there is. It arrives by email, it's a list of forty lines and a total, and the total is the thing you'd rather not see, so the email sits there, and the not knowing feels like knowing because the minimum went out.

There's a second number people don't know, and it's the rate. Ask most cardholders what interest they pay and they'll say "about twenty per cent" without having looked, and it may be twenty-nine, or thirty-four on a store card, and the difference between twenty and thirty-four on four thousand pounds is several hundred pounds a year. The rate is on the statement, in the part after the forty lines, and it's the column on the sheet that decides the order in chapter 20, and almost nobody has ever read it.

So "I know exactly what I owe" is worth testing with a pen. Write your guess for the total before you do the two lines, and then do them, and compare. The gap between the guess and the total is the size of the not-knowing, and for most people it's larger than they're comfortable with, and it's the reason the sheet from chapter 1 is where the method starts.