can't buy app with gift cards

I am new to apple. I have $35 credit from app cards and itunes cards purchased at an Apple store. The app store will not allow me to purchase an app, and provides a prompt page which does not appear to allow payment via the 'apple money', but cites:

"You must verify your payment information before you can make purchases." A series of credit card choices are provided.

My apple account page confirms the $35 balance still...

I'm wicked frusterated. I've spent 50 bucks with no actual product recieved yet. Does apple demand a credit card or debit card after taking debit payment in the store? That can't be... Please help, any help is appreciated.