I can’t purchase with my gift card

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 Account balance and (2) then 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.

See also -> 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)

and ⤵️

• 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.

If you still need help, get more help and assistant from Apple directly, see Contact Apple for support and service -> Contact Apple for support and service – Apple Support (UK) 

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See also:  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

To use an Apple gift card you need to redeem it. The article "What type of gift card do I have?" explains the different kinds of gift cards Apple uses, has links on how to redeem them, and what can be purchased with each kind. Click on the link --> What type of gift card do I have? - Apple Support

You will find you you do not need to do anything about making the balance be the default payment method. Your account balance is automatically set as the default method and you couldn't change that even if you wanted to.