Buy an Itunes gift card - any amount. Download itunes to your computer and setup an itunes account. Then when it asks for billing option - do not fill out the credit card info (even though it insists you do) and simply punch the authorization number of the itunes gift card in the second section. Wait for it to process and when complete you will get the same screen, but you no longer need to provide credit card info - just the billing address at the bottom.

I set up a new Ipad 2 for a friend who insisted on not using his credit card. This is how i got it to work:Hope that helps someone.