iTunes gift cards....

You redeem iTunes gift cards using "your" iTunes account. If they have separate iTunes accounts, iTunes will keep everything straight by account. If they share the same iTunes account, then both gift cards will be combined in that account. If you want them to keep everything separate, then they need separate accounts.

If you share the itunes account, then all of the cards will be credited to the same itunes account. They will not be separated.

The cards are redeemed to an itunes account, not a device.

You can share your itunes library among different users. Type "Share itunes library" into the search bar at the top of this screen next to "Support".

Each user can make their own playlists so that the music they like will be easily accessible.

Here's the deal, you can sync as many devices(iPhones, iPods & iPads) as you want to the same iTunes account, there is no limit. You can have the same content on each device or different content, the choice is yours. iTunes will get everything straight, by device, upon subsequent syncs. It makes things easier, if you give each device its own unique name, i.e.-Sam's iPhone, Jane's iPhone, etc., to keep things straight, by device.

Since you only have one iTunes account, even if you give each child their own iTunes gift card, the total amount of all the gift cards will be combined under that one account. Does that make sense to you? When you sync, the iTunes account info, the account you are logged into in iTunes, is synced to the phone. The only way to keep each child's "gift card" separate from each other would be to have individual accounts.

"So you can have one itune account but "different users" listed on the account? "

You can have different users on your computer. They can all share the same itunes library and account.

"OR are you saying that you still can't keep them separate that way?"

Yes. You cannot keep them separate. When you redeem a card it credits the account.

You're welcome.

I am not sure how old your children are but you should consider that eventually they will be older and want to manage their own iTunes library, iTunes account and have their own computer. It may be worthwhile setting them up with their own iTunes library and iTunes account now, under their own computer user accounts (profile). You can easily manage the sharing of the content between these libraries.

Sharing of iTunes content is built into iTunes, its called "Home Sharing". You are permitted under the EUSLA to share iTunes content among 5 authorized computers/family members in the same household. Requires separate computers:

http://support.apple.com/kb/ht3819

If you don't have separate computers, post back & I'll give you detailed instructions on how to share content among different iTunes accounts on the same computer.

This is what I recommend you do:

First, create separate logins on the computer that will be used. This will insure that there is no chance of inter-mingling of any data(contacts, calendars, etc.), yet permit the sharing of iTunes content among all users. Then:

1. Under each login, disable auto-sync when an iPod/iPhone is connected under preferences>devices in iTunes(under the edit menu if using Windows).
2. Lets say we're logged on the computer using child A's login. We want to share iTunes content from child B's library. The content we want to share must be on child B's phone.
3. Connect child B's phone with iTunes running. DO NOT SYNC!(remember, we disabled auto sync in step 1).
4. Sign child A out of iTunes & sign child B in.
3. Go up to Store>Authorize this Computer.
4. Then File>Transfer Purchases(all of the purchased content child B's phone will be transferred to child A's iTunes library.
5. When complete, eject the phone, sign child B out out of iTunes & sign child A back in.

Child A can now sync whatever content was transferred to their iTunes library from child B. You can repeat these steps for each child and each login.

Keep in mind, app updates MUST BE DONE using the account used to originally purchase them. I.E.-child B's apps are in child A's iTunes library but need updating. Sign child A out, sign child B in, update the apps, then sign child B out and A back in.

You only have to do the Store>Authorize this Computer once in the directions above, but YOU MUST sign in to the proper account to transfer purchases each time you transfer.

That's it. It may seem complicated at first, but once done works great & will permit your children to share content among each other yet have their own separate iTunes accounts.