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If you're running into that code while trying to redeem a prepaid code through Xbox Live, it generally means that there's some sort of balance on your account. Usually it happens when you have/had a subscription on the account and it renews, but doesn't charge your card for whatever reason.
You can add a new credit card to the account to cover the balance OR your best bet is to callXbox's billing support. They can check on your billing and let you know what's going on. Usually they'll wipe out the charge for you too!
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