@Bradley146 I'm not sure what she means that she used the wrong credit card. If the card didn't have enough credit limit on it, the booking would be cancelled by Airbnb.
The cancellation policy you have in place when a guest books is the one that applies to their booking. Any settings a host changes only apply to future bookings, not confirmed ones.
It's also not beyond the realm of possibility that she is just wanting to completely cancel, but doesn't want to lose the money, so is just making an excuse to try to get you to refund her in full.
This is something you shouldn't get involved in as a host. Guest payments are between the guest and Airbnb. Just tell her to contact Airbnb and work it out with them, there's nothing you can do about it on your end.
On another note- you need to edit your listing ASAP- it says 8 guests and 0 beds. Also you should have a photo of the bathroom (toilet seat lid closed), and if there's a backyard, show that, too.