Why do I need to pay the first time to modify the Xbox code?

If by "Xbox code" you mean your gtag you can only pick one for free (as alternative to the random gtag appointed) when you register for xbox live.

If you want to change your gtag after that you have to pay a fee like everyone else

As metal says you can only select your Gamertag once for free and it is obvious that your tag is a custom tag and not a system assigned tag.

That's the thing, though, cause this is the first time it's done this. It started doing this sometime in December, and the payment went through when I paid for it through my Microsoft account. But now it's saying I need to pick a different way to pay, but on my console, it's telling me I need to update it, but it's not telling me exactly why it needs to be updated. I've tried everything, and nothing is working, so now I have to unsubscribe from Game Pass Ultimate. I had to pay for 3 things that day I paid for the amount to keep using Game Pass Ultimate, the first thing I paid for was the subscription, then was paying a bill that was due in a few days, followed by getting something to eat. I don't understand why it's doing this now, since I've been doing this since I first got this card last year in July. It'll be on and off, but never tell me "Pick a different way to pay" repeatedly.

@eggnogga -.- its whatever dude. its obvious you are biased towards the "JUST PAY FOR LIVE, ITS A BIZNESS" side of the argument, and whatever i say will not persuade you. but i like fighting for my freedoms. if you wanna [Removed by Moderator]
by whoever comes along telling you that you have to do something, be my guest. no matter what region you live in, the united we stand divided we fall quote is national advice in my opinion.

@swawLoe_deez -- You do realize the majority of people who have responded in this thread actually do not live in the United States, right?

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You were doing soooo good in your post, but then you made that assumption: "milkin' the little kids of their allowance." That's where you lost me. When you assume the only people who pay for Gold are 12-16 year old boys... your aura of arrogance/ignorance
shines through.

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Also, your analogy in regards to a policemen pulling you over is way off. "Doing everything the cop says...." Like what? Handing over your license, registration & proof of insurance? I mean, you're seriously trying to organize a lockout over something
like Netflix? Seriously, as I pointed out previously, if you don't agree with one company's business methods...do not support them. Speak with your wallet.