Currently Being ModeratedSep 1, 2012 4:54 AM (in response to happy_looker)
iTunes is an application, no it is not down.
The store or their processing function may be having issues... for that information you would need to contact iTunes customer support to inquire.
Currently Being ModeratedNov 4, 2012 5:29 PM (in response to happy_looker)
I was having this exact issue when I was set up to use PayPal as my payment method. I fixed it by -
1. going to my iTunes account and selecting None as my method of payment, then clicking Done
2. confirming this on my account page - which then said Add (or Set up, I can't remember) a Credit Card
3. on the Add a credit card page, I again set up the exact same PayPal account I had before.
4. I was then taken to the PayPal website to confirm that I wanted to use my PayPal account for iTunes purchases, and finally
5. I was taken back to my account page in iTunes, which looked exactly the same as before BUT...
The next time I tried it, my purchase went straight through! (And this was less than 5 minutes after I'd had the "Credit Card processing is temporarily unavailable" message.)
YMMV, but I guess a similar revalidation process would work for credit cards too.