How to Save Up to $3,000 a Year

The Leak: Paying the Minimum on Credit Cards

The fix: The average U.S. household carries a little more than $9,000 in credit-card debt, according to CardWeb, a payment-card research site. At an average annual interest rate of 13 percent, you'll spend almost $1,000 on finance charges alone in one year. Savings accounts earn little to no interest, so dip into them to pay off your balance. If you don't have savings, pay double the minimum and slowly increase your payments each month. "You will work off the balance faster and reduce the total amount of money that you will pay out over the long term," says Nick Jacobs, a spokesman for the National Foundation for Credit Counseling. Pay off higher-interest credit cards first, and never skip a payment, which can result in a late fee of $35 or more and an increased rate on all your credit cards. To calculate the most efficient payment schedule, visit creditcardnation.com and click on "Debt Zapper." If your bills are out of control, contact a nonprofit credit-counseling service, such as the Association of Independent Consumer Credit Counseling Agencies (aiccca.org), to locate a counselor who may be able to help you negotiate lower rates with your banks.
Savings: $10 to $20 a month.