Is there any way to set max and min cardinality of a field.

yes u can ..........i was also wondering for the same but may be not the right way to do

set the max limit of the filed using variable_set();
implement hook_field_widget_form_alter and add one hidden field as delta
and on every click check the delta value for the max limit and make the add another item as display:none;

another solution is that on every add another item form is getting rebuilt and hence u can get the form array in hook_form_alter there also you will get the value of delta and can respond accordingly