credit card vs apple balance

You can't, except by asking the iTunes Store staff to either zero the balance or put it back onto the card, or gifting the content.

(101684)

You can't specify how a purchase is charged, if you have a balance on your account then that will be used up first.

By 'they have a free offer' you mean ? What are you trying to buy from the iTunes store ? If it's not an in-app purchase then you can try gifting the item to yourself (gifts are charged to credit cards, you can't gift via your balance) - I haven't tried it, but I think that you should be able to gift to yourself.

Gifting : http://support.apple.com/kb/HT2736

Redeeming gifts : http://support.apple.com/kb/HT1574

I gifted myself as well via my iPhone yet it didn't charge my credit card. Does gifting have to be done via iTunes on my PC or Mac?

I just checked again and after about 6 days it is showing up on my credit card on file now. Thanks!