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In order to activate your product: XBOX Live Gift Card, Gold Membership Card, Games CD Keys, on Xbox live you can do it both through XBOX website and console:

1,XBOX Website

If you are going to redeem the key through the website go to https://www.xbox.com/

Then login into your account.

On the top right you will find your avatar - click on it and select 'Redeem code'.

Then enter you key and continue to redeem it on your account.

2, Console

If you choose to redeem your key directly through your Xbox console then login to your account.

Go to the Store and select 'Use a code'

Then enter your key and follow the steps to activate it on your account.