The option to add payment method is grayed out and not selectable on my iphone settings

Hey SunnyKat55,

Welcome to Apple Support Communities.

We see you're unable to add a payment method to your iPhone 12.

If you're a member of a Family Sharing group and Purchase Sharing is enabled, you will not have the option to add payment method. This is because all payments goes through the organizer. If the organizer doesn't want to continue sharing purchases, they can remove it by following the steps in this article: How to share purchases with your family. Once it's disabled, you will be able to use your own payment method.

If Screen Time is enabled on the device, the option to add/update payment methods might have been restricted. To read more about parental controls, check out this article: Use parental controls on your child's iPhone, iPad, and iPod touch.

Also, make sure the iPhone is up-to-date. This step ensures all security updates, new features, and fixes have been installed. Follow the steps below to confirm the iPhone is up-to-date.

1. Back up your device using iCloud or your computer.

2. Plug your device into power and connect to the internet with Wi-Fi.

3. Go to Settings > General, then tap Software Update.

4. If you see more than one software update option available, choose the one that you want to install.

5. Tap Install Now. If you see Download and Install instead, tap it to download the update, enter your passcode, then tap Install Now. If you don't know your passcode, learn what to do.

The steps above are also included in this article: Update your iPhone or iPad.

Hope this helps. Take care.