Sweetie, you must be sure to use a .png file because those allows transparencies. If you use a .jpg file will show white around the edges. Most kit have both files.
To change a .jpg into .png (if you don't have both files in your kit) first make a copy of the layer and erase the bottom layer. Then with your magic wand select all white and erase. To erase the white of the tiny hole zoom it in and place the magic wand in the hole.
Now everywhere that was white will now show at a chess board. Go to "save as" and save it at .png file

I hope its helps