When you learn the "Card" ability with Quetzacoatl it unlocks the "CardMod" ability. CardMod allows you to change cards into items (under the "Abilities" menu).

Some cards require more than one in order to create an item. For example, to create one energy crystal you need 10 Elnoyle cards.

I just started a file (six hours ago, that is), and I'm in the process of collecting cards, myself, at Balamb cafeteria.