You can increase the potential of your cards by merging them. This is done with two cards of the same star tier. However, they first must be at their maximum level. You will receive one card of a higher star tier in exchange for sacrificing the two cards at maximum level. Merging allows you to start leveling the new improved card again. Save your least important cards to improve your other cards.
Rare cards
To get higher tier characters, consider playing the gacha by spending crystals. The premium gacha can randomly award you with cards from three star to seven star rarity.