Unable to download/update App's

Hey guys & gals,
I have an Ipod Touch which I got last year July, I had purchased iTunes credit and bought a bunch of App's etc.
For the past 6 months I haven't updated or rarely used my iTouch and recently began using it again and found a frustrating problem..
When i try and download (FREE) App's or Update some App's It comes up with a message:
Verification Required
Before you can make purchases, you must tap Continue to sign in, then verify your payment info.
(I have Already signed in at this point with my Apple ID and password)
I hit continue:
It comes up with Account Page with a warning..
"Your account has been accessed from a new computer or device, and you must verify your payment info before you can make purchases. "
It asks for me to update my Credit Card Information, Which i have done.
And my credit card is direct debit and works fine. No problems there although there is little money on that card at the moment.
After I enter my security code, it says:
"Your payment method was declined. Please enter another payment method."
Now I don't have another payment method and I don't understand why I need one if all I'm doing is updating my App's and downloading Free ones.
Help?

Ok,
Will i need a new email address? If so why cant I just use my normal account?
I just tried creating a new account, using my original email..
"Target person/group/service/company ID is required. Please populate it in your request. "
I have entered my email as my ID..
I don't want to have to create a new email just because apple cant fix my account..

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