Are you talking about using your Apple ID balance as default payment?
If so, see -> How to redeem your Apple Gift Card or App Store & iTunes gift card
How to redeem your Apple Gift Card or App Store & iTunes gift card – Apple Support (UK)
When redeeming a gift card, (1) the amount will be credited to your Apple ID balance and (2) then you need to set your Apple ID balance as your default payment.
(1) See -> Check your Apple ID balance
Check your Apple ID balance – Apple Support (UK)
(2) See -> Change, add or remove Apple ID payment methods
Change, add or remove Apple ID payment methods – Apple Support (UK)
If you update your payment method or add funds to your Apple ID balance, It would take about 1 to 3 business days in order to process.
If you're still unable to update your payment method, Contact Apple Support.