Why are BC games and gift cards incompatible?

They've never given a reason why, but the Xbox One store has just never been updated to see the Microsoft Account balance as a valid payment option for backwards compatible content. The only way to use the funds would be to make the purchase on a 360 console.

Thank you for taking the time to let us know what worked for you.

I would like to add that in-addition to what was stated by Xbox Forums MVP Ambassador and Moderator Smwutches, there is a way to purchase
content from an Xbox 360 title using the currency on your account, if you are able to access an in-game store via the emulator that allows you access to the Xbox 360 Marketplace[similar to how on the title screen you would see an option that reads
Store or something like that].

Its always worth providing your feedback via that
Xbox Idea Hub to hopefully see this feature added in the future.

As there is no further information that we can provide to you on this matter, we will now be locking this thread. If you have any other questions or concerns that differ from this matter, please, feel free to create a new thread and we will cater to you
there.

Thank you for being part of the Xbox Family and we wish you a wonderful day!

I traded my 360 in for an xbox one. I hope Microsoft changes it before I get rid of my xbox one.

Yes, thank you. However, the issue comes from having a gift card, only owning an Xbox One, and wanting a BC game.

i wish they had the deal up still bc ik for a fact it said if you bought the gold digital edition you would still get the rewards bc thats why i did it online otherwise i would have bought it on my xbox and got 20$ from a free gift card.