Q: download using iTune gift card

iTunes Store: How to redeem a code - http://support.apple.com/kb/HT1574 - If you have an iTunes Gift Card or other code that you want to redeem in the iTunes Store

Buy items. A few such as gift cards cannot be charged to your balance, otherwise things you buy will be charged to the balance from the card.

http://support.apple.com/kb/HT1574  Regards.

2 ways to do redeem the code of the card. First is from iTunes. 2nd is easier, open the App Store in your iPhone, go to "Features" tab, scroll down to the bottom of the page, click Redeem, enter the code.