A spending limit is a cap on the value of purchases that a card or account will allow. It may apply to each transaction, to a day, week or month, or to the life of the card. When a requested transaction would take the total over the cap, the issuer declines it during payment authorization.
Limits come from different sources. On a credit card, the overall limit is the credit line the issuer has granted. On debit and prepaid cards, issuers set daily purchase and cash withdrawal limits to contain losses if a card is stolen, within the balance available. In business card programs, the company assigns each employee or virtual card its own limit as part of its spend controls. Regulators also impose limits in some cases, for example on wallets and prepaid accounts opened with reduced identity checks under tiered KYC.