There is a theory that the use of holy medals in the Catholic Church might have originated from pagan practices, when missionaries Christianised the amulets which were often believed to confer protection upon the wearer.
Today there is no suggestion that a holy medal is a sort of charm. Instead it is a “sacramental”, listed in the Catechism of the Catholic Church as among the “forms of piety surrounding the Church’s sacramental life”.
Holy medals express an evangelical instinct and a human wisdom that prepares the faithful to receive the fruit of the sacraments and to sanctify different circumstances of life. They might dispose the wearer to receive grace and to cooperate with it.
If a holy medal shows a picture of, say, a saint, it should remind the wearer to seek the grace to follow their example more closely and to ask for their intercession. A medal bearing a depiction of Our Lord should help the wearer to draw closer to Jesus and to love him more deeply.
Holy medals are worn to express in a practical way a person’s communion with the saints and their closeness to and dependence upon God.