You need to update the payment method in the App Store, but you cannot do that if you are on Mac OS X Lion.
you need to upgrade your Macs OS, but you can only do that if you update your payment method in the App Store
etcetera, etcetera, etcetera, this is the Catch 22 Apple implemented over a year ago and have done nothing about it
even after being told many many times.
There is a way around it, do you have another Mac with a newer OS on it or can you borrow one. If you do or can login to the App Store using the Apple ID you use on your older Mac, then update your payment method. Go back to your older Mac and
see if you can now login to your App Store account.