Cant redeem or purchase from xbl even with valid credit card

Contact support and request that they escalate your to the advocacy team about your billing account being splintered or split. It's a bug quite a few of us are facing. So far they are going case by case and there's been no blanket fix announced.

forums.xbox.com/.../1793186.aspx

Actually this could also be an issue attached to the billing info already placed on file, the splintered account wouldn't block him from being able to make redeems, but yea I'd advise to contact support so they can look into your account, for all we know
it could be a decline, risk block, or violation

Hi OstrichTheGamer.

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Unfortunately, it's currently not possible to use stored credit from Xbox gift cards as a valid payment option for XBL Gold. This is due to the automatic renewal (which is on by default) requiring a valid credit card or Paypal account.

As far as I know you must provide a valid credit card for purchases. Even with Xbox 360 Smartglass and Xbox One Smartglass. There needs to be a valid credit card on file

sooo everyone keeps saying that u cant use a prepaid credit card...which is BS...ive been using prepaid credit cards to purchase alot of xbl content,and i just used this card to buy myself some more points and it worked....10 minutes later im tryin to use
it again and im getting this stupid error message,and the website is telling me to use a valid credit card number...like i just used it 15 minutes ago to buy something and it was ok but now its not accepting it?what is this retardedness?