The full version of Photoshop has a great feature that allows you to adjust the kerning (space between letters) on the fly.
Using the Type tool, type a word or phrase and press Ctrl Enter (Mac: Cmd Enter) to commit the type.
Select some or all of the letters by clicking and dragging over them with the Type tool selected.
Hold down the Alt key (Mac: Opt key) and press the right arrow key one or more times to increase the space between the letters.
Hold down the Alt key (Mac: Opt key) and press the left arrow key one or more times to decrease the kerning.