The Magic Bands at Walt Disney World are like an all access bracelet - depending on where you are staying they can hold your tickets, FastPasses, PhotoPasses, Dining Plan credits, room key and even charging privileges.
Selecting your Magic Band
You get the most out of a MagicBand if you are staying at a Disney hotel. You also get them for free if you are staying there. Once you have booked your holiday, you link your reservation in the My Disney Experience and then you have the option to pick which Magic Band you would like for each of your party - there is a choice of 8 coloured bands. Sometimes, there will also be another option - for instance when Toy Story land opened, there was a Toy Story themed band included. Technically you get these for anyone with a ticket - i.e. age 3 and over, but Disney also provide them for the little ones too, even though they don't do anything, so that they don't feel left out. (It is this kind of little detail that makes us love Disney so much - we used to 'beep' our toddler into the parks). If you want a character magic band, instead of a coloured one, they are available to purchase in lots of shops around Walt Disney World and you simply sync them up to your My Disney Experience account after you arrive.

Using your Magic Band
When you check into your Disney hotel, you'll each be given your MagicBands - they'll have your names printed on the inside so you don't mix them up if you have the same colours. These will have your tickets, Fastpass+, Disney Dining Plan credits and room key on them. When you go to your room, you simply swipe your band and the door unlocks - like Magic 🙂
The same works for entering the parks. You swipe your band over the receiver, put your finger on the scanner, the gate turns green and you're good to go. The bands will be linked to the first finger you use to scan on your first trip into a park - this is so park tickets are only used by one person. If you've got small children with tickets - probably best for ages 3, 4, 5 -you can choose to use your own finger - i.e. you scan in on their behalf, as well as scanning yourself in. It makes it much easier than wrangling an excited child to put the correct finger in the right place every morning. Be warned though, that means you always have to be with them when entering the parks. It sounds obvious and that you always would be, but we were surprised how many times it was inconvenient that it had to be me accompanying her through the gate. Most commonly because we were attempting to divide and conquer on the bag check, one of us taking our daughter in through the quick 'no bags' line, while the other one handled the bags. On balance it was still easier than getting her, at 3 years old, to do it though.
When you check in to your hotel, you'll also be asked if you want charging privileges on your Magic Bands. This allows you to buy literally anything around the parks - from the shops, to dining, to gratuities, using your MagicBand, and it is then charged to your room. To do this, you must provide credit card details on check in. The great thing about this is that you can choose who in your party should have charging privileges. You may wish for it to just be the adults, and the responsible teenagers, and only their MagicBands will be activated for charging. We'd always advise you have another means of payment with you, because occasionally there are system problems and you don't want to be stuck without money - we usually have a credit card in the depths of a bag somewhere, but I don't think we've ever had to use it.
Similarly, I take screenshots on my phone of my FastPass+ reservations, just in case I ever need to show that we've got one if the system goes down - but I've never used them for that purpose. The wifi in the parks is occasionally ropey though, so it is useful to have them written down outside of the My Disney Experience app to remind me what we've got.
If you are on a Dining Plan, your credits will also be stored on your MagicBand. Just like entering the park, when you go to pay for your meal, you simply swipe your band. Your credits will be deducted and you can then charge any additional items (and gratuities if it is table service) to your room via the MagicBand, or pay for them by another means. Your receipt will tell you how many credits you have remaining, or your My Disney Experience app is updated immediately to reflect the changes.
Magic Bands for non-Disney Resort Guests
If you are not staying in a Disney hotel, the MagicBands are still available for purchase, in lots of stores around the parks. You then link them up to your My Disney Experience account and anything you've got on there is then stored in your MagicBand - so your tickets, Fastpasses etc. It all works in the exact same way - there is just slightly less advantage as you don't have the dining plan or charging privileges. You also do not have to have one - you can keep your reservations and tickets on the app, or your tickets on the paper card you may have purchased ,if you prefer.
We've been going to Walt Disney World for many years and MagicBands are relatively recent addition, but a very welcome one. They just make everything so seamless and easy - no keys, no tickets, no paper passes for Fastpasses and photos, even no money - just grab your MagicBand and go!