Q: How do I use credit on my iTunes account?

If you are buying items for yourself (you can't use a balance to gift content) then your balance should be automatically used when you buy something from the store, you don't need to do anything special - just click on the item's price to buy it. From http://support.apple.com/kb/HT5582 :

When making purchases, content credits are used first, followed by Gift Certificate, iTunes Card, or Allowance Account credits; your credit card or PayPal account is then charged for any remaining balance.