The amount a lender will extend follows from models rather than from a single decision at application.
Initial assessment
Income, commitments and credit history.
Which determines the opening limit.
Ongoing review
Behaviour monitored and limits adjusted.
Which is why limits change without any request.
Increases
Offered where models predict profitable use.
Which regulation requires affordability checks for.
Reductions
Applied when risk indicators change.
Which can happen with no missed payment.
Why limits change without warning
Lenders review portfolios continuously, and indicators including credit file changes, utilisation patterns and broader economic conditions feed into that.
Which means a limit can be reduced with no missed payment and no change in your circumstances.
It also means a reduction is not necessarily a judgement about you specifically, though it does affect your utilisation ratio and therefore your credit score.
Requesting increases
Available and subject to affordability assessment.
Which may involve a credit search.
Declining increases
Offers that can be refused.
Which some people prefer for spending control.
Utilisation effects
Higher limits improving the ratio.
A general note
Lending practice and regulation differ by jurisdiction.
Why the plumbing is worth understanding
Most personal finance advice is about decisions: what to buy, what to save, what to avoid. Very little of it is about how the systems underneath actually work, and that is where a surprising amount of avoidable cost and avoidable risk sits.
Knowing that instant payments are hard to reverse changes how carefully you check a transfer. Knowing that deposit protection applies per licence rather than per brand changes where you hold savings. Knowing that card payments carry dispute rights changes how you pay for anything uncertain. None of those is a financial decision in the usual sense, and each of them matters more than most of the decisions people agonise over.
The pattern across all of this
Financial systems are built by institutions solving their own problems, and the consumer experience is a by-product. Fees are structured to be hard to compare. Rates are set on the assumption that most people will not move. Protections vary by mechanism in ways nobody explains at the point of use.
None of that is a conspiracy. It is what happens when complex systems are designed for the people running them, and the remedy is simply knowing where the differences are.
Where to find the reliable information
Financial regulators publish consumer guidance covering exactly this material, free and with nothing to sell. Payment scheme operators publish how their systems work. Deposit protection schemes publish their limits and which institutions they cover.
All of it is dry, none of it is promoted, and it is considerably more useful than the commercial content competing for the same attention.
A general note
Banking, payments, credit and insurance are regulated differently in every country, and the specifics here vary accordingly. This describes how these systems generally work and is not financial advice; anything with money attached warrants checking against the rules where you are.
The habits that follow from all this
Pay by card for anything you have not received yet. Check transfer details carefully because instant means instant. Verify unexpected requests through a number you found yourself rather than one you were given. Review your savings rate once a year and move if it is poor. Check your credit file annually for errors.
Five habits, none of them requiring any financial expertise, and between them they cover the majority of the situations where households lose money to something other than a spending decision.
Why nobody tells you this
There is no commercial incentive to explain how payment protections differ by method, because the explanation does not sell anything. There is a substantial commercial incentive to advertise financial products, which is why that content is everywhere and this content is not.
Regulators fill some of the gap with consumer guidance, and it is genuinely good and almost entirely unread. That is not a failure of the regulators so much as a consequence of it being unpromoted and competing against material with marketing budgets behind it.
What matters most
Of everything described here, two things account for most of the practical difference: how you pay for things, and whether you check anything once a year. Both are free and neither requires any decision more complicated than noticing.
Where to check the specifics
Financial regulators, payment scheme operators and deposit protection bodies publish the actual rules that apply where you live, and they are the authoritative source rather than any general description.
Rules in this area also change: reimbursement obligations, interchange caps, overdraft pricing and renewal pricing have all been reformed in several markets within recent years.
One closing point
Almost nothing described here is difficult, and almost none of it is explained at the point where it would be useful. That gap is the actual subject of all of it.