How am I managing my credit after the pandemic

In December 2019, the world changed dramatically. COVID-19 has caused catastrophic damage and upheaval, and worsened the financial situation of people. Almost overnight, consumers began to change the way they charge. A Federal Reserve report updated in 2021 notes a sharp decline in the use of loans after the initial shock caused by COVID-19.

However, as the pandemic subsides, many people and small business owners have gained enduring wisdom from this experience. Dr. Adam Leffler is one of them.

As managing partner of Bargain House Network, a real estate education, entertainment and acquisitions website, Loeffler has been 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 payments on time, he was able to get the credit he needed. The company bounced back in a big way. Kevin Harrington, aka Shark Tank, is now one of the hosts on the program and his show kicks off October 13, 2022.

Here’s what Loeffler learned about how to handle credit before, during, and after the crisis.

What was your credit like before the pandemic?

I have had ups and downs over the years, but before the pandemic, my credit score was pretty good. It was at seven hundred, and I always felt compelled to make at least the minimum payments.

I have been fortunate enough to have learned some lessons already, having suffered some financial setbacks in 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 coup?

Definitely. I grew up on a farm in rural Illinois, I had loving parents, but we didn’t have money and we faced a lot of hardships. We used to run out of fuel oil, we sewed clothes at home and the like. I didn’t really know we were poor until I went to high school when I realized that I don’t have what most other people have.

But I learned some good lessons about how to work hard and dedicate myself to what I’m passionate about. This also applies to loans. You must admit that this is an important part of your life. And I tried to teach my children the same thing – how to get a loan and how to manage it.

Who taught you how to use credit?

This is an excellent question. I got a credit card in college and didn’t have any preparation for it. I went out and immediately insulted him! But in the end, I managed to pay off the debt that I got into. It was a hard lesson, but it was a life lesson.

Later I got to work with some real estate gurus and learned what they do with credit. I watched them approach and it shaped mine. It’s important to have a mentor if you want to learn something, but make sure it’s someone who’s really good at it.

How have your credit habits changed during the pandemic?

Obviously, I had to focus a lot more on making the minimum payments and on managing what resources we had. I also needed to borrow a little more than we normally would like.

But I have carefully monitored our overall borrowing ratios to make sure those payments are being met. Just paying the minimum was painful, but you do what you have to do, and that’s what we did. We had to promote our credit, personally and otherwise. My credit scores have taken a bit of a hit because my credit usage has increased, but paying on time has helped.

What was the most difficult for you?

I hated just making the minimum payments. I like to pay off my debts at the end of the month, but I couldn’t do it. I had to tweak which accounts got a little more. It made me remember the days when I was growing up. And it wasn’t a pleasant experience.

Have you learned anything about yourself regarding money and credit during this time?

I realized that no matter how good I think I am at managing my capital resources and making payments, there is always room for improvement.

I had to figure out how to get myself into a position where we weren’t overly leveraged. It was an enhanced lesson during the pandemic because I personally stretched more than was comfortable. I was lucky that my credit was adequately protected and I was able to use that and change it in a way that allowed us to stay afloat for a period along with some borrowing.

Is there a credit card that 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 love the perks (this card includes perks like discounted in-flight food and drinks, free baggage check-in and priority boarding). In addition, Barclays has been a great bank to work with and has been very flexible during the pandemic.

Bottom line: here we are at the final stage of the pandemic. How are you doing with your credit now?

I’m working with our loan partners, talking to them about extending our available lines of credit so we can have a little more breathing room, and about restructuring any debt we still have. We are again seeing an influx of money, and I am looking to strengthen these relationships with banks in the hope that I can increase my ability to raise funds and implement even more projects.

The pandemic has certainly made me more conservative about cash flow and loans. I’m not likely to stretch that far again.

*AAdvantage® Aviator® World Elite Business Mastercard® card information was collected independently by CreditCards.com. The issuer did not provide details and is not responsible for their accuracy.

Erica Sandberg is a well-known personal finance professional and author of Waiting for Money: The Essential Financial Plan for New and Growing Families. Her articles and insights have been featured in The Wall Street Journal, Pregnancy, Babytalk, Redbook, Bank Investment Consultant, Prosper.com, MSN Money and Dow Jones MarketWatch. An active television and radio commentator, Sandberg is a credit and money management expert at KRON-TV in San Francisco, and a frequent guest on Forbes Video Network, Fox Business News, Bloomberg TV and all Bay Area networks. Prior to starting her own reporting and advisory business, she worked at the San Francisco Consumer Credit Counseling Service where she advised individuals, conducted educational seminars, and managed the media relations department. Sandberg is a member of the Society of American Business Editors and Writers and a member of the Project Money Advisory Committee.