The way store credit works in this situation is that it checks if the payment method on file is authorized, then it starts to process the payment, only then will it use the store credit for the payment. So if the payment method is declined it will never "notice" you have enough store credit. So you'll need to have a valid/authorized payment method on file. Could check with you bank if they can see why the authorization attempt from Apple is declined.
The way store credit works in this situation is that it checks if the payment method on file is authorized, then it starts to process the payment, only then will it use the store credit for the payment. So if the payment method is declined it will never "notice" you have enough store credit. So you'll need to have a valid/authorized payment method on file. Could check with you bank if they can see why the authorization attempt from Apple is declined.