Q: why do I need funds in my account to download or even update applications

You don't.

It's likely wanting you to *verify* billing info.  You won't be charged unless you're buying something that costs money.

That is untrue.  I know this for a fact.  I have removed my credit card and don't have a balance, yet have no issues.  You must be leaving something out.

I'm guessing that you are using a debit card issued by your bank and tied to your savings or checking account.

If you have a credit or bank issued debit card registered in your account as the payment method, when you sign in, the system automatically tries to do a check for usable funds on the card's account by doing an authorization hold. If you have no funds in the bank account to which the card is associated then the check for funds fails and your payment method is rejected.

Mac mini, OS X Yosemite 10.10.3; Apple Watch, 38 mm silver AL, Watch OS 1.0.1; iPad Air 2 & iPhone 6+, iOS 8.3

What you need to do is to detach the debit card from your apple id.  Once detached, you will be able to do your things with free stuff.

Robert

Once a card is in the account, to remove it, there must be a None option in the payment methods or the user must supply another payment method.

How to:

Change or remove your Apple ID payment information in the iTunes Store - Apple Support

& you need to pay all your bills first.

Why can’t I select None when I edit my Apple ID payment information? - Apple Support

And if you muck through all of that, you will see that it supports exactly what I said.

There are folks who report that they have taken every step in that link and they can't get the None option.

However, this user, mountaingoatgirl, explains how to get a None (No bank card) option in your account details in the iTunes app on a Mac or PC. -

https://discussions.apple.com/message/24907941

Folks who tried everything in the link about the None option and were unsuccessful report that they were successful with these instructions.