This might be suspicious, though less so if you have actually purchased increased storage. Real emails from Apple will always address you by name, not 'Dear customer' or your email address, and will always come from the apple.com domain (though this can be forged). if the message provides a link to update your payment do not follow it. If you need to update your payment method go directly to your account in iTunes.
If you have purchased increased storage and you have sufficient credit from gift cards there shouldn't be a problem, though as it's a recurring charge Apple might require you to have a credit card on file, even though credit from the gift card would be used first.