Do I have to have a credit card on file?

If you are being asked to enter a payment method, Apple has multiple criteria* requiring the presence of a payment method, even for free items. Since you may be encountering one of those situations, you have no option but to enter a valid payment method if you wish to continue downloading. Read the support article Add a payment method to your Apple ID - Apple Support about how to do that. The payment method may not be charged if you also have account balance or the item is free, but the payment method has to be present. This next article lists valid payment methods for different countries but note that in this situation Apple Account balance alone apparently may not meet the requirement and you need to use another payment method until you find one that satisfies Apple's requirement (often a credit or debit card): Payment methods that you can use with your Apple ID - Apple Support .

If you have already entered a payment method, use the first link above to check it. If a message appears in red there is a problem with it. If the information is still correct and current, contact your financial institution.

* Ref.:

If you can’t download or update apps on your iPhone or iPad - Apple Support

- "You might need to have a payment method on file, even if the app that you want to download is free."

Remove a payment method from your Apple ID - Apple Support

- If you have any active subscriptions, you must have at least one payment method on file other than Apple ID credit.

- You might not be able to remove a payment method if you have a balance due.

Sign in with your Apple ID - Apple Support

- "When you sign in to the App Store and other media services for the first time, you might need to add a credit card or other payment information."

How apps, content, and subscriptions from Apple are billed - Apple Support

- You can’t charge gifts to your Apple ID balance. If you send a gift or gift card, your primary payment method is charged.

- Some subscriptions might not be charged to your Apple ID balance.

What you can buy with your Apple Gift Card or Apple Account balance - Apple Support

"Some purchases might require that you have a credit card on file, even if you use your Apple Account balance to make the purchase."

You may need to have a valid payment method on file, even if the app you want to download is free.

You can have a credit card / debit card on file and an Apple Account balance.

If you have set your Apple Account balance as your default payment method, your default payment method will be used first by Apple when you need to make a payment.

Some purchases might require you to have a credit card on file, even if you use your Apple Account balance to make the purchase.

1.

You can download free apps, but you may need to have a valid payment method on file, even if the app you want to download is free. 

As long as you only download free apps, it costs nothing.

Then your payment method remains intact.

If you are going to download a free app, there is a possibility to purchase the 'better' version, for example from a free version to pro version.

But that is not mandatory.

Use your Apple Account balance as default payment, then it is up to you whether you use it or not.

Free apps has also In-app pruchase.

Your payment method is actually a kind of deposit, if you buy something, it will be charged.

2.

If you don't have a credit card or don't want to use a credit card, you can also use your Apple Account balance as payment method.

See -> What you can buy with your Apple Gift Card or Apple Account balance

What you can buy with your Apple Gift Card or Apple Account balance – Apple Support (UK)

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• You can't use your Apple Account balance to send gifts or gift cards.
• If you use Family Sharing, your family members can't spend your Apple Account balance. Funds that you add to your Apple Account balance are only available to you. Find out more about how purchases are billed to your Apple Account balance.
• Some purchases might require you to have a credit card on file, even if you use your Apple Account balance to make the purchase.

See also -> 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, the amount will be credited to your (1) Apple Account balance and (2) you need to set your Apple Account balance as your default payment.

(1)

See -> Check your Apple Account balance

Check your Apple Account balance – Apple Support (UK)

(2)

See -> Add a payment method to your Apple ID

Add a payment method to your Apple ID – Apple Support (UK)

If you already use your Apple Account balance, the Apple Gift Card or App Store & iTunes gift card is automatically added to your Apple Account balance.

If you update your payment method or add funds to your Apple Account 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.

See also -> Payment methods you can use with your Apple ID

Payment methods you can use with your Apple ID – Apple Support (UK)

fyi: Not all credit & debit cards seem to work with App Store / iTunes Store, try a different one, or preferably a credit card. If your card is not accepted as a paymenf method, you need to contact your bank.

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See also this Apple article:  If you can't redeem your Apple Gift Card or App Store & iTunes Gift Card

If you can't redeem your Apple Gift Card or App Store & iTunes Gift Card - Apple Support

Beware of -> About Gift Card Scams -> About Gift Card Scams - Official Apple Support 

If you still need help, get support from Apple directly -> Get Support or call Apple in your region see -> Contact Apple for support and service or check -> here for more support and assistance.