Magic makes things easier. You can light a fire with a flick of your fingers or wand, get that TV remote to levitate to you so you don't have to get off the couch, and you can turn invisible.
But all magic should come with a price. A poorly crafted magic system would be one where magic is unlimited and you can use it without restraint or consequence.
One of my biggest pet peeves with Harry Potter (correct me if I'm wrong about this, but this is what I remember) is that to cast a spell, all you have to do is wave a wand, say some fancy words, and believe hard enough, and the spell gets cast. You can do this as many times as you want with no ill effect on your health, as far as I saw. You could fling around killing curses with a flick of your wand, throwing them left and right. There was no limit to magical ability or power. Yes, Dumbledore could cast bigger spells, but it was never really explained why or what he was doing differently that allowed him to cast bigger spells while the others couldn't. Harry and friends could do stupify, petrificus totalus, petronus charms, and so many others without any consequence (except social consequences, but those aren't inherently tied into the magic system itself). Death Eaters could cast as many killing curses or crucius curses as they wanted.
A good magic system is built around spells that cause as much harm as good, inherent to the magic itself. There has to be some negative consequence to the user for using magic, or it has to be hard to use. Maybe each person has only a limited amount of magic in them, and using too much at once can kill them. Maybe every time they cast a spell, they lose minutes/hours/days of their life. Maybe magic is incredibly difficult to use and can easily overpower and kill the user if the spell is cast incorrectly. Maybe blood or a body part must be sacrificed before casting a spell. Or collecting certain hard-to-find items to cast the spell. Maybe every time you cast the spell, you're shifting the world out of balance somehow. Maybe your character can teleport, but only a small object a limited distance away.
In Howl's Moving Castle, when Howl shapeshifted into his bird form, he was warned that if he stayed in that form too long, he wouldn't be able to turn back into a human.
I believe Eragon could only use as much magic as his body could endure, and he'd grow weak and tired after overusing his magic.
Sanderson's Mistborn magic system required the user to ingest metal in order to cast spells. Once the metal ran out, they'd have to ingest more to keep working magic.
The magic in your worlds needs to have limits and consequences. Otherwise it'll dampen the tension and conflict because "Oh, the character can just cast as many spells as they want. They're not in any real danger." If your characters can whip up infernos at will, without any physical/mental consequence, it's hard to make the readers care. (exceptions to all this, of course!) Or sometimes, if your characters can do all these crazy spells, but then during the climax they don't, it's like .... why?
Harry Potter and the time turner thing, for example: why didn't he just go back to when Voldy was a kid and do away with him before all that shit went down? (if there's an actual explanation to this that I missed, so be it, but the point for this how-to is that you don't want to have your characters doing some incredible magic, or have the ability for it early in the story but never use it again because--AUTHOR NEEDS CONFLICT.)
In short, even if your characters can use magic, it should cause as many problems for them as it helps them. Form your magic system around the limitations and consequences of magic, and it adds another layer of conflict to your story. Don't make things too easy for your characters, and don't give them unlimited, unparalleled power (unless you have a very good reason for it). Magic should make things harder for your characters. Not easier.
One exception to this might be that since there's unlimited power, laws would be put in place to stop magic, and rumors could be spread and superstitions evolved around the use of an all-powerful magic. I did this in Guardian Redemption. Everyone can use dark magic, which is much more powerful and natural than normal light spells, but it's incredibly dangerous and unstable. A taboo evolved around it so people fear it now instead of harness it.
Or maybe using magic is a very rare thing, seen as a bad omen or evil so your magic-wielding character gets social consequences (harassment, banishment, death, etc.) from using magic.
Another exception to consider is (and you can definitely argue this was the case in Harry Potter) that to cast a certain spell, you must learn a specific form and way of controlling/using it. We all have the capability to knit a scarf, but you gotta learn how to do it first. So maybe spells are all-powerful and unlimited, but learning them is incredibly difficult.
Whatever you decide to do, make sure your magic system is one where:
1. certain conditions/requirements need to be met before a spell can be cast
2. consequences (physical/mental/social/etc.) arise from use/overuse of magic
3. just basically causes some kind of harm in some way to someone or something. BAM don't you love the vagueness of that statement? Lol
Edit: I need to stop using Harry Potter as a counter example. It just spawns unnecessary debate over irrelevant details, and many of you focus on that rather than the point of the how-to.... so yeah, ignore the Harry Potter example and just try to focus on the take-home ideas in bold.
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