You will have to use your sign/sail card for just about everything on the ship, drinks, tours, shopping. They even put the tips on there, but you can have them changed, add/remove if you wish and then tip the old fashioned way with cash. Once onboard its basically a cashless society, last day you will get an itimized statement of all your charges, that will then be billed to the credit card you gave them when you boarded. Just keep track of everything you use it for, because it does add up quickly.
Princess just deducts the credit from your on-board account before billing you (or your credit card) for the balance due.
Since everything that you spend aboard ship gets billed to your stateroom account (including purchases in the ship's shops and at Princess Cays, bar beverages, personal services at the spa and beauty salon, photographs and developing services from the ship's photo lab, and shore excursions), you probably will not have any problem spending the whole credit.
We were given a shipboard credit by the cruiseline. It was good for all shipboard purchases. There was a surcharge to get gambling money in the casino. I think it was a %....I can't remember how much though. Call Princess, I'm sure they can tell you. Happy cruising!!!!!!!