On board credit can be used for all your on board expenditure i.e. drinks, photos, excursions, shops, etc. It just gets credited on your account. You should see it on your cruise invoice.
This will be applied to your on board account so will be deducted at the end of your holiday. You can use this for drinks, the surcharge for the Bistro (I would reccomend this)or Luna, to use in the Spa or for any shore excursions. I am sure you will find a way to spend it and will have a fantastic tim.