How I handle my credit post-pandemic

In December 2019, the world abruptly changed. COVID-19 caused catastrophic damage and upheaval, while also throwing peoples’ financial circumstances into disarray. Almost overnight, consumers started to change their charging ways. A Federal Reserve report, updated in 2021, found a strong reduction in credit use in the wake of the initial COVID-19 shock.

As the pandemic winds down, though, many individuals and small business owners gained lasting wisdom from the experience. Dr. Adam Leffler is one.

As managing partner for Bargain House Network, a real estate education, entertainment and acquisition website, Leffler was grateful for maintaining his good credit throughout the pandemic. In 2021, he needed to borrow capital to keep the business going and growing, and because he made his payments on time, he was able to get the necessary credit. The company bounced back in a big way. Kevin Harrington, of Shark Tank fame, is now one of the program hosts, and his show launches Oct. 13, 2022.

Here is what Leffler learned about how to handle credit before, during and after a crisis.

What was your credit like before the pandemic?

I’ve had my ups and downs over the years, but before the pandemic, my credit score was pretty good. It was in the seven hundreds, and I always made a point of making at least the minimum payments.

I was fortunate enough to already have learned some lessons, having suffered some financial setbacks during 2007 and 2008 when the housing bubble burst. By the time the pandemic hit, I was better prepared.

Did your upbringing also prepare you for the upheaval?

Definitely. I grew up on a farm in rural Illinois and had loving parents, but we didn’t have any money, and we dealt with a lot of hardships. We used to run out of heating oil, make clothes at home, things like that. I didn’t really know we were poor until I got to high school when I realized I didn’t have what most other people had.

But I learned some good lessons about working hard and applying myself to the things I’m passionate about. That applies to credit too. You have to accept that it is an important part of your life. And I’ve tried to teach my kids the same thing — how to establish credit and how to manage it.

Who taught you how to use credit?

That’s a great question. I got a credit card in college and had no training for it whatsoever. I went out and abused it right away! But I was eventually able to make good on the debt I got into. It was a hard lesson, but it was a life lesson.

Later I was able to work with some of the gurus in real estate and learned what they were doing with credit. I observed their approach and that shaped mine. It’s important to have a mentor if you want to learn something, but make sure it’s from somebody who’s really good at it.

In what way did your credit habits change during the pandemic?

Obviously I had to focus a lot more on making the minimum payments and on managing what resources we did have. I also needed to do a bit more borrowing than we’d normally like.

But I was careful to watch our overall borrowing ratios so I could make sure those payments were being met. Just paying the minimums was painful, but you do what you gotta do, and that’s what we did. We had to push our credit, personally and otherwise. My credit scores took a slight hit because my credit usage was up, but paying on time helped.

What was hardest for you?

I hated just making the minimum payments. I like paying my debts off at the end of the month, and I wasn’t able to do that. I had to adjust which accounts got paid a little bit more. That made me think back to those days when I was growing up. And that was not a pleasant feeling.

Did you learn anything about yourself regarding money and credit during that time?

I learned that as good as I thought I had been at managing my capital resources and making payments, that there’s always room for improvement.

I had to figure out how to move myself into a position where we weren’t over leveraged. That was a reinforced lesson during the pandemic, because I personally got stretched further than was comfortable. I was fortunate enough that I had protected my credit enough, and I was able to use that and flex it in a way that allowed us to stay afloat during the period along with some borrowing.

Is there a credit card you particularly like?

I have about six credit cards but my favorite is the AAdvantage® Aviator® World Elite Business Mastercard®*. I travel a lot, and I like the benefits (this card includes such perks as a discount on in-flight food and beverages, free checked bags and preferred boarding). Additionally, Barclays has been a great bank to work with, and it was very flexible during the pandemic.

Bottom line: Here we are, at the end stage of the pandemic. How are you handling your credit now?

I’m working with our credit partners, having conversations with them about extending our available credit lines so that we can have a little more breathing room and restructuring any debt we still have in place. We’re seeing more cash coming in again, and I’m looking to strengthen those banking relationships in hopes of being able to increase my leverage ability and do even more projects.

The pandemic certainly made me more conservative in the ways that I address cash flow and credit. I’m less likely to be stretched that far again.

*Information about the AAdvantage® Aviator® World Elite Business Mastercard® has been collected independently by CreditCards.com. The issuer did not provide the details, nor is it responsible for their accuracy.