Go on iTunes, then go on the iTunes store and click "Redeem", type in 16 digit code on the back of your iTunes gift card. After that it should add the money on to your account and then just spend the money. Hope that helps.
To pay using a credit card: 1) Open iTunes. 2) "iTunes Store" 3) "Account Info" 4) "Edit Payment Information" 5) Enter your credit card info. 6) Scroll down and click Done.
some stores such as target, let you trade in a target card for an itunes card, but make sure they are same price. (ex: $25 target card --> $25 itunes card)
An iTunes gift card puts some credit on your account once that has been used you will need another gift card or bank/credit card to purchase items from the iTunes store.