Custom profile fields are extra pieces of information you can add to every user's profile, such as their department or location. You can then use them to group users into segments.
What you can use them for
Custom fields are mainly used to keep your user base organised by grouping users into segments. Once users are grouped, you can report on specific groups, assign admins to manage individual segments, and automate enrolments.
To learn more about segments and how to set them up, see What are organisational segments?
When you're ready to add a custom profile field, see How do I create a custom profile field? If you later need to remove a field, see How do I disable a custom profile field?