Hi Paul,
As per checking, when you redeem a digital Xbox card, the value is added to your Microsoft account balance. You can then use this balance to buy digital games, downloadable content, apps, movies, or subscriptions like Xbox Game Pass and Xbox Live Gold.
To proceed, on your Xbox console, go to the Microsoft Store, select the item you want, and when you choose “Buy,” your account balance will be automatically applied. On a Windows PC, open the Microsoft Store app, sign in with your Microsoft account, and purchases will also use your redeemed balance.
Additionally, you can also check your balance anytime at account.microsoft.com under “Payment & Billing.” Note that the redeemed balance is non-transferable, may have region restrictions, and usually cannot be used for physical hardware purchases.