Rainbow magatamas can be besetted in your charms. First slot unlock at charm level 3, second at charm level 6 and third at charm level nine. Once besetted, you can upgrade the rainbow magatamas (same process as normal magatamas).
So far, this is what I have observed and I may be wrong. To upgrade your charms without paying ingots/coupons, participate in the ultimate training. I think there will be a guide up soon.
Edit1: More information here: http://forum.naruto.oasgames.com/en/forum.php?mod=viewthread&tid=18066&extra=&page=1
This post was last edited by Narbsy at 2017-4-20 23:06