Watch the Using a Capo online guitar lesson by Chris Buono from 60 Electric Guitar Techniques You MUST Know
A capo is a device that safely clamps on to the neck and is meant to hold down the notes on the fret you position it to. Think of it as your new nut. This allows you to play open chord fingerings in other locations on the neck allowing those chords to serve you in whatever keys you want them to. What's more playing with those open position approaches in higher parts of the neck helps deliver a brighter, tighter sound while giving you the ability to play in ways that would be otherwise impossible in those keys and in those ranges of the neck.
Looking for inspiration? Aside from the conventional capo applications, there are some very creative approaches to consider. For instance, check out Trace Bundy who uses multiple capos of varying sizes throughout his compositions. That's right, sometimes he only clamps down part of the strings while leaving other string open to play as such or fret below the capo!