The credit card swiper, in my opinion, is a very bad idea... Especially when you're cold selling and you're trying to build trust with them in a limited time. Also, do people not walk around with notes anymore?
I would suggest that $3 is making your music sound cheap. That's not meant to sound disrespectful, but the psychology in saying "Buy my mixtape, it's $3." makes me think it's not even worth the $3. On the other hand if you upped it to even $5 your customers wouldn't be breaking the bank to buy it, it's a reasonable price for buying something the customer has never heard before and it gives your CD a bit more value.
If you're unsure about upping the price, you could even ask what the person wants to pay. Even if people do take it for free, you should still attract enough customers who want to pay. A lot of people aren't cheeky enough to take something for free. I know a lot of people who make a living selling their music this way, and they tend to average £4 ($6) by opting for the "pay what you want" model. I know one guy who made £30,000($45k) profit in 2014 by just selling CDs. 30 mins before the doors open for a Hip Hop shows he'd socialise and ask if they'd like to buy his tape, stating they could pay what they want. He did it about 6 times a month. That excludes the money he made from shows, merch and CD sales at his shows or anywhere else for that matter.
Another thing which will help you make more sales... Make sure you're in the right place or talking to the right people... The example I gave earlier was of a friend of mine standing outside before shows (Pharoahe Monch, MOP, Erykah Badu, even a Herbie Hancock concert in 2012) where the genres of his and the performers interlinked. So... Where are your ideal fans?
Furthermore, when approaching people, don't be salesy. I was in Manhattan a year or so ago walking past Macy's and there were so many guys trying to sell me mixtapes. All of whom were acting as if they were door to door selling. "Excuse me, you like Hip Hop? Buy my mixtape!!" before I snubbed them and they moved on to the person in front of me. Now, stopping me and having a chat, being a regular human being and they'd have probably got a sale... You know, a normal conversation about an event that's going on which moves on to Hip Hop and then their mixtape. It may take more time, but you then build a long and short term rapport which gives you a higher chance of making a sale and then getting a fan for life.
The same can be said for promoters. Be human/the normal you and you'll get a lot further with them. Build a long term rapport and when the time is right, they'll sort out a gig. Take part in some open mic events and prove your worth... Invite the promoters you meet along (if you're on that sort of friendly term)... If they like what they see and hear, you'll get a gig.
If they are unsure of numbers, simply ask how you can get a gig with them. They will probably say something along the lines of you have no worthwhile fan base OR you can open up for so and so as I need someone to be the first act and you'll get 15 minutes. If you're struggling to prove to them that you're worthwhile, quote some numbers to them "Oh, we made so many sales in the last month.", "We have so many people on our mailing list", etc.
In regards to your advertising... I probably wouldn't spend any money at all with traditional/local advertising. I would suggest you invest a good portion of your budget in to an e-commerce website. It's easy to do with Wordpress.
Also, again I disagree with fatal tone... Social media is important, but please, whatever you do, don't make it a priority. If you don't have a newsletter, get one. MAKE THAT YOUR PRIORITY. Start a blog on your website, you already vlog so you're half way there. Write up on your day to day adventures. I don't know anyone who sells CDs on the street then blogs about it so I'd highly recommend it - it will essentially put you ahead of your competition...
I could discuss your online possibilities for days, so I apologise if it seems brief. This response is already long enough. I'd be happy to go in to detail about it though. I can also send you a list of things I use for my website and newsletter, most of which are free...
To conclude, I would suggest you spend your budget mainly on improving your music. Take $300 of the $1000 and build a website (you will probably only need $150-200 in reality). After that save $200 of your budget as you may see an advertising opportunity you want to utilise after you release the mixtape. The rest can go on improving your sound, the quality of your CDs and graphics.
