Hi 0413ds,
Welcome to the Apple community.
Seems you should be able to use your Apple ID balance to pay for Apple Music ...
however it may not be available in all countries and regions.
When you press redeem ... that is for just for entering gift card information directly.
See the article (link below) to find out what payment methods you can use in your country or region:
Payment methods that you can use with your Apple ID – Apple Support (AU)
Apple support also have an article online:
What you can buy with your Apple Gift Card or Apple ID balance – Apple Support (AU)
NB article also says at the bottom:
"Some purchases may require that you have a credit card on file,
even if you use your Apple ID balance to make the purchase."
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If needed:
How to: Get music on iPhone – Apple Support (AU)
Music Support
Music - Official Apple Support
Apple ID support
Apple ID - Official Apple Support
All the best :-)