App store prompting for credit card information

Question

I am using an iPhone 3G and iOS 3 (I have not updated for several months).
Occasionally, when attempting to download an app from the app store, I am prompted to read the newest version of the EULA. After agreeing to it, I have to download the app again.
Something similar is happening and I'm a bit weary. I am not being prompted to view a new EULA. Instead, I am being prompted for my credit card information. In the couple years I have owned the phone, I have never seen this happen.
Upon trying to download an app, I first receive a popup called "Verification Required" telling me that "Before you can make purchases, you must tap Continue to sign in, then verify your payment info."
Please note that I have already typed in my password to download the app and the app is FREE.
When I click "continue," I am taken to an application page (I'm assuming in App Store) asking me to type in my credit card information. All of the information is already filled out (as I already have my cc set up with my iTunes account) except I'm required to type in my security code to procede.
What exactly is going on here?

Answer 1

The only time I have seen this is when either the CC has expired or I have changed the card I used for a purchase in iTunes and the phone then asked me to verify the card information when I wanted to buy an App.
A few days ago I wanted to use my AMEX card instead of my bankcard that I had originally registered to make a purchase through the iTunes website store and when I then wanted to buy an App from the phone I had to enter my AMEX card info into the phone. It still requires verification if there has been a change even if it is a free App.
Has the card you originally entered in iTunes expired and been renewed in which case the phone will ask for the new expiry date or have you opted to use a different card in iTunes at sometime?