Why do I need a valid credit card to update a free app?

Refer to the document:

If you can’t download or update apps on your iPhone or iPad - https://support.apple.com/HT207165

- "You might need to have a payment method on file, even if the app that you want to download is free." If you have something else on your account that requires a payment method, such as a subscription, and your current payment method is not working then Apple won't let you download even free things until you fix the payment method. This is explained in this document, 'If your payment method is declined in the App Store or iTunes Store' - https://support.apple.com/HT203005

You say, "A game I have spent several hundreds of dollars throughout these years on in app purchases," so that's why Apple is insisting that you have a payment method associated with your account.

You can use -- and I have used -- an Apple ID with no payment method, but then the apps I download are truly free and I do not use any of the in-app purchases.