I have seen a fair number of people run into problems trying to use their iTunes gift card to either set up an iTunes account or buy music on the iTunes store. I therefore decided to do some research about this problem.

Yes, you can use an iTunes gift card to set up an iTunes account or buy music on the iTunes store (if you do not have a credit card or do not want to use a credit card). Below is a step-by-step instruction from apple.com on how to do that.

How to Create an iTunes account with a Gift Card, without using a Credit Card.

1. Install the latest version of iTunes. You can download iTunes for free from the iTunes webpage. If iTunes is already installed on your computer, check your version and update if necessary.
2. Open iTunes.
3. In the Source list (on the left side of the iTunes window), click iTunes Store.
4. In the upper-right corner of the iTunes Store window, verify that the button next to Account says “Sign In.” If this button displays an email address instead, click the button and then click Sign Out.
5. In the iTunes Store window, click the Redeem link in the right column.
   
   
   
6. In the resulting screen, enter the 16-digit code printed on the back of the gift card (it starts with an “X”), then click Redeem.
   
   
   
7. In the resulting screen, create your new iTunes Store account. You will have the option to enter credit card information; if you do not wish to do so, click the None button on the Payment screen.
8. Once you’ve successfully redeemed your music card (gift card), the credit amount will appear next to the Account details in the upper-right corner. Each time you purchase music, iTunes will deduct funds from the credit until it’s depleted. If a pending purchase exceeds the credit amount, iTunes will ask you to enter a credit card number. You do not need to re-enter your gift card number to make multiple purchases.

If you already have an iTunes account and would simply like to redeem an iTunes gift card, see below for instructions on how to redeem an iTunes gift card or gift certificate.

How to Use iTunes Gift Cards and Certificates

To use an iTunes Gift Card or Certificate you must first download the latest version of iTunes.

Gift Cards and Certificates are valid for use only in the country in which they were purchased. Only residents of the U.S may redeem gift certificates purchased in the U.S.

To redeem iTunes Gift Cards or Certificates, go to the iTunes Store and in the “Quick Links” section in the right column, select “Redeem”. Or go to the iTunes Store “Redeem Code” area directly by visiting http://www.apple.com/itunes/store/gifts.html

In the resulting screen, enter your iTunes Gift Card or Certificate code in the field. If you are redeeming an iTunes Gift Card you need to use the 16-digit code on the back of your card (to be scratched off). If you are redeeming an iTunes Gift Certificate you need to use the certificate number listed on your email certificate. Enter the numbers exactly as they appear.

Once you redeem your iTunes Gift Card or Certificate, the full amount appears as a credit next to your Apple ID in the upper-right part of the window. Any time you buy an item, the purchase price (+ tax) will be deducted from the balance.