Q: How to use my gift card

If you haven't already done so then redeem it onto your account so that its value is transferred to it : Redeeming iTunes Gift Cards and content codes

As long as you are buying content for yourself (you can't use your balance for gifting) then your balance should automatically be used when purchasing an item : iTunes Store: How iTunes Store purchases are billed

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.