I was a bit confused by it all when I first started using Giffgaff.
Let me explain the bottom line.
1) Credit on your phone is added and used up by making calls and sending texts.
So if you put £10 credit on your phone it will go down by 8p every minute you ring someone and by 4p every time you text.
If you don't use the phone, the credit stays there forever.
2) Buy a goodybag with your £10 and it lasts exactly 31 days, then you have no money on your phone, it's gone.
Whilst your goodybag is within its 31 days, you have 150 minutes to use up, unlimited texts, and unlimited internet.
3) If you have a goodybag AND credit on your phone, the credit would be used for anything that is not covered by the goodybag. eg 0871 calls etc. and when the goodybag expires, you would be running on credit until you buy another goodybag.
You decide whether to use your money on goodybags or credit. Your choice.