How I Went From $500 in Credit to $200,000

Getting a low credit limit is normal when you don't have much credit history. My first credit card had a limit of just $500 -- enough to pay for a few trips to the grocery store or half a smartphone.

If you're in this situation, you've probably experienced how inconvenient it is. You need to carefully manage your spending to avoid hitting your credit limit. And even if you don't max out your card, using a large portion of your limit could still hurt your credit score.

I've been able to increase my credit quite a bit over the years. I now have over $200,000 in limits across my cards. Here's how to do this.

1. Always pay on time

Your credit limit primarily depends on two factors: your credit score and your income. If you have a high credit score, that can help you get a higher credit limit.

The most important part of your credit score is your payment history. A track record of on-time payments will boost your credit score, but even a single lay payment can seriously damage it.

The good news is that payments are only considered late once they're at least 30 days past due. If you pay a day or two late, or even 29 days late, it's still considered an on-time payment for credit scoring purposes.

I've never had any late payments on my credit history, and I've built an excellent credit score. Because I've proven to be a reliable borrower, banks are willing to trust me with more credit.

If you have a high credit score, make sure you're taking full advantage. Check out our list of the best credit cards for big bonus opportunities, 0% intro APR offers, and much more.

2. Increase your income

The other key factor that determines your credit limit is your income. Card issuers are required to consider how much you could realistically repay when they set your credit limit. If someone makes $25,000 per year, they probably won't be able to get a $100,000 credit limit.

You don't need to earn a massive salary to get a high credit limit. But raising your income can help, especially if you want a large amount of credit. It can also make life easier for you. The more money you make, the more you can save and invest.

When your income goes up, don't forget to let your credit card issuer know. You can normally update your income in your online account. You may even get an automatic credit limit increase.

3. Open multiple credit cards with different banks

My credit isn't all with one card or bank. It's spread out across cards with Chase, American Express, U.S. Bank, and several other card issuers. Yes, I have a lot of credit cards.

This is important because card issuers have limits on how much credit they'll extend to you. Let's say you have a $10,000 credit limit on a card. Your bank has decided that $10,000 is the most it feels comfortable letting you borrow, so it won't approve you for any more credit cards or any credit limit increases.

The simple solution is to apply for a card with a different bank so those internal limits aren't a problem. It's also a good opportunity to branch out and try cards with new perks. Maybe you'd like to save some money on your next vacation or get into airport lounges free of charge. If so, click here to see our picks for the top travel rewards cards.

4. Ask for credit limit increases

If you want a higher credit limit, you can always ask the card issuer. Call the number on the back of your card or check if there's an option to request a credit limit increase online. You're more likely to succeed if you've been using the card for at least six months and have always paid on time. If your income is higher now than it was when you opened the card, that also helps.

I did this as I was building credit, and I still do with my cards that have smaller limits. You have nothing to lose, and you could get a higher credit limit in a matter of minutes.

Don't get discouraged if you have a low credit limit. Banks are risk-averse, and they usually start people out small. If you follow those steps, you'll quickly qualify for more credit.