I am told that my total is $29.99 (with discount) option screen says I can pay with refund will deduct $39.99 do I have to use a credit card to get the discount?

If you are paying your TurboTax fees with your federal refund, there is a 39.99 charge from the refund processing company for that. You can avoid that fee and only pay the 29.99 by using your credit or debit card.