How to use bait?

You can buy lures in the shop on your island. To use a Fish Bait, select the bait next to your inventory, and before casting the line, throw it anywhere in the water. This will cause a fish to appear on the surface, allowing you to fish there.

Ultimately, Fish Bait is not an essential item when it comes to catching fish – but it saves you time to search for shoals of fish and waiting time for the fish to show up.