You make charms by transmutting old equipment. To transmute go to the mage and if you are on Droid swipe left (from right to left) on the words above aqua and inferno. If on ios then swipe below. That will take you to the transmute page. Choose the equipment you want to transmute by tapping on it and holding down on the button until the circle fully goes around. Be aware that once a piece is transmutted it cannot be undone.