Can't use Apple Account funds for in-app purchases

This article broadly outlines what you can buy with your Apple Account [Apple ID] balance --> What you can buy with your Apple Gift Card or Apple Account balance - Apple Support

• "Where the Apple Gift Card is available, you can use your Apple Account balance to buy products and accessories at apple.com or in the Apple Store app."

• If being confused by a being asked to enter a payment method, “Some purchases might require that you have a credit card on file, even if you use your Apple Account balance to make the purchase."

There are some exceptions, from: How apps, content, and subscriptions from Apple are billed - Apple Support

Apple Gift Card and Apple Account balance can't be used for some purchases:

• You can't use your Apple Account balance to send gifts or gift cards.

• For some recurring charges, like AppleCare+, you can't start a subscription with Apple Account balance. But as long as you keep another valid payment method on file and your Apple Account balance would cover an entire charge, a recurring charge will pull from your Apple Account balance. In some countries and regions, Apple Account balance can’t be used for some subscriptions like AppleCare+.

• Some subscriptions might not be charged to your Apple Account balance.

• 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 available only to you. Learn more about how purchases bill to your Apple Account balance.

I suspect you are seeing a message on the screen, what does it say?

If it says there was a billing problem with your previous purchase:

If a message says 'billing problem with previous purchase' or 'verification required' - Apple Support

If it says your purchases have been disabled:

If a message says 'Your Media & Purchases account has been disabled' - Apple Support