I need to update my Apple iOS

Your iOS version and your payment method have nothing to do with each other.

To update your payment method follow this guidance→If you need to change or update your Apple ID payment method - Apple Support

To update iOS go to Settings/General/Software Update and follow the instructions on the page. To update over the air from the phone all of these requirements must be met:

• To update over the air from the phone all of these requirements must be met:
• You need at least 10 GB of free storage for iOS 16 and later or 6 GB for iOS 15 or lower; more is better
• You must be connected to a Wi-Fi network (and not a personal hotspot) unless it is an iPhone that supports cellular 5G (12, 13, 14, 15 or SE 3rd edition) and has a 5G network connection
• The phone must be charged to at least 50%, and preferably plugged in so it stays above 50% during the update
• The phone must not be in Low Power Mode
• The phone must not be connected through VPN, and it may be necessary to delete any VPN apps and VPN profiles
• The phone cannot be in Airplane mode and must have a cellular data connection
• You cannot still have a beta of a previous version installed on the phone
• You cannot have a previous version that was downloaded, but not installed - go to Settings/General/iPhone Storage to look; if you find an iOS installer, delete it

If you can't meet all of them you can still update using your computer.