Update payment Details

1. iCloud Storage and the device's local capacity are 2 different things and have nothing to do with each other. Having a larger capacity device has no bearing on the amount of iCloud storage you may have or be paying for.
2. For users with active iCloud plans, Apple has upgraded them for free to the new iCloud+ subscription which includes severals new features. But you still have to pay for the iCloud subscription you have. It does not in any way mean you get iCloud storage for free.
3. If your payment method cannot be charged, your iCloud storage will be cancelled and anything you store in iCloud that exceeds 5GB will be deleted. However, you will still be held accountable for the pending payment. That is you will need to allow it to complete successfully. Once that happens you can request a refund for it if you no longer need iCloud.
4. If you don't need to the storage space, then cancel it by following the steps here: link-> Downgrade or cancel your iCloud+ plan - Apple Support

However, if it has already been attempted to be charged, then you need to let it complete otherwise your account will be left in bad standing with the store and blocked from using its services which includes downloading Apps and buying media.

Once you have correctly cancelled the subscription, and have allowed the pending charge to complete, you can contact Apple Support for a refund by clicking here: link-> Learn how to request a refund

Hi LeoCapone,

Thank you for contacting Apple Support Communities. Based on what you stated, it seems like you were being asked to update the payment method.

Are you able to try updating using a different payment method? If so, does it still ask you to update the payment details?

Change, add, or remove Apple ID payment methods

Please don't hesitate to let us know if you need additional assistance.

Cheers.