Why isn't there a facility to set credit limits for sales customers?

The absence of this option in QuickBooks Online can be attributed to factors like development priorities and technical feasibility, @graham25. I'll go over some details to explain it further.
 

Implementing a credit limit feature requires significant changes to the existing system, including how invoices and payments are processed. Intuit also focuses on adding features based on user demand and overall product strategy.
 

If this feature is crucial for your business, I recommend sending feedback directly to our Product Developers team. You can share ideas you want to add and improve in QuickBooks. This way, they will review your feedback, identify areas that require enhancements, and consider incorporating them into future updates. 

Here's how:

1. Hit the Gear icon at the top, then select Feedback.
2. Type in your product suggestions.
3. Click Next to submit feedback.

You may visit the Customer Feedback page to get updates about the status of your feedback.
 

Moreover, refer to this article if you need to apply the credit memo to an invoice to reduce your customer's balance: Create and apply credit notes or delayed credits in QuickBooks Online.

Stay in touch if you have more concerns regarding your invoices in QuickBooks Online, @graham25. Just click the reply button below and I'll provide further help.

@graham25 

The feature is available in QB Desktop. What kind of business do you run? You may consider having a 3rd party app (e.g inventory management, CRM) to integrate with QBO as a workaround.