Sometimes when you are redownloading a game/app, the system doesn't recognize it as a previous purchase until later in the purchase process and then offers to download it for free.
But the point here is that you appear to state that you've added an invalid payment method. A payment method that isn't funded. When you are required by Apple to have a payment method registered in your account, it must always be functioning, it has to have funds that can be used. If it's a credit card, there has to be available credit. If it's a debit card, it has to be funded, or if it's tied to a bank account, the account has to have available funds. The system always verifies that the payment method is functioning. If it isn't functioning, you can't use the account.
You won't know what the issue is until you have added a functioning payment method to your account.
M1 Mac mini, macOS 15.5; Watch, series 10 GPS-only, watchOS 11.5; iPhone 16, iOS 18.5; TV 4th Gen, tvOS 18.5 HomePods, audioOS 18.5