NEW YORK (CNN/Money) - Interest rates won't suddenly spike higher tomorrow, but now is a good time to start positioning yourself for a change.

Market watchers believe rates will rise as the economy recovers and they say the Federal Reserve has signaled a shift in its commitment to low-interest rates (see more).

Higher rates may mean you'll pay more interest on your mortgage or your credit card. Know what to do with these five tips.

This is where you'll see rates move first because mortgage rates usually follow the markets (particularly 10-year Treasurys), rather than Fed moves.

For that reason, you'll want to lock in low rates now. According to Freddie Mac, the average rate is 5.68 percent for a 30-year fixed mortgage.

An extended period of rapidly rising rates could make homes more expensive for prospective buyers. If such a situation were to persist, home prices would actually fall. But home prices tend to be slow-moving, so it would take a long period of higher rates to impact home prices.

Over the past few years, consumers have used their homes as a cash machine, taking out home equity lines of credit and other loans to pay for everything from flat-panel TV screens to a home addition.

CNNfn's Gerri Willis shares five tips on how you should prepare for rising interest rates. Play video (Real or Windows Media)

Cashing out your home equity becomes an increasingly dangerous game as interest rates rise because, like credit cards, home equity lines have variable rates. That could be a problem if rates were to rise sharply.

However, now may not be the time to swap to a fixed-rate home equity loan if you already have a HELOC. The national average on a HELOC is currently 4.74 percent, while the national average home equity loan rate is 7.28 percent. The 2.5 percent gap, or 250 basis points, is quite large and it may be a couple of years before it narrows substantially and becomes disadvantageous.

Bankrate.com senior analyst Greg McBride says consumers currently choosing between home equity loans and lines of credit should consider a HELOC if the payback period is three years or less. If the payback period is longer than three years, consider a home equity loan.

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Rising rates will boost your credit card debt fast. Consider obtaining a fixed rate credit card if you currently hold a variable one. Be aware that this is no panacea as credit card companies can boost your fixed rate with just 15 days notice.

The best solution for saving yourself from the pain of higher rates? Pay down your cards. Also, remember you can negotiate a lower rate by calling the card company directly. You might even describe a recent low-rate card offer you've received to give them some incentive to give you a break. The average interest rate Americans pay right now is 12.9 percent, so your rate should be below that.

If you've been trying to save money over the past few years, you've suffered through a period of pretty abysmal returns. Six-month certificates of deposit currently pay just 0.93 percent, while money market funds pay half a percent, on average. While the prospect of higher interest rates is enticing, it's not here yet.

McBride says that until rates begin to rise there is no advantage of locking up money for the long haul. If you have to reinvest a certificate of deposit, you'll want to reinvest for a short period, say three to six months, so you'll be ready to put your money to work when rates are more attractive. Don't forget to shop around for the best yield.

One savings alternative is stable-value funds. These mutual funds invest in high-quality bonds and fixed-rate contracts from insurers and pay 4.68 percent, on average, in 2003. Take care in shopping for these products as some require that you put them into an IRA.

The old fashioned way of hedging your portfolio against inflation however is buying stocks. A little inflation gives companies the ability to rise prices on products.

Rising rates is bad news for bond investors. One strategy that can help you side step the pain of rate fluctuations: laddering. That simply means buying bonds in staggered maturities so that as they mature you can put your money to work, resetting the overall yield of the fixed income portion of your portfolio.

Make sure you don't buy bonds with maturities longer than your intended investment time horizon. In other words, if you're saving for Junior's freshman year at Harvard which starts in a decade, don't buy 30-year bonds to finance his education.

Another good idea: Look at the Treasury department's TIPS, or inflation protected securities. Yields on these bonds reset with inflation changes. Remember, bond prices move in the opposite direction of yields.  

Gerri Willis is the personal finance editor for CNN Business News. Willis also is co-host of CNNfn's The FlipSide, weekdays from 11 a.m. to 12:30 p.m. (ET). E-mail comments to 5tips@cnnfn.com.