Skill Points (SP) can be used to increase your skills with different weapons and talismans. Higher skills allow you to use better weapons and talismans. You gain 1 SP for each time you completely fill the XP bar.
Press K to view and upgrade your skills. To spend your SP, simply click the corresponding skill you wish to increase and click one of the buttons labeled with an SP cost.
Each weapon has two skill lines that grant different bonuses. Your actual skill is equal to the highest of the two skill lines.