WASHINGTON - A word of warning before you pull out the plastic to pay for your holiday gifts: you could get hit with some unexpected fees or rate hikes, even if you pay your bill on time.

"Most companies have a clause in their contract that says that they can raise interest rates, fees at any time for any purpose," said Pamela Banks of the Consumers Union. She says in this uncertain economy, even customers who pay on time could get hit with higher interest rates.

Credit card companies set rates based on risk. If you charge (what they deem) too much, miss a payment or even carry a large balance for too long, your contract could change.

Some shoppers are being cautious, according to Scott Krugman of the National Retail Federation.

"Seventy percent of consumers plan to use debit cards or cash rather than credit cards this holiday season," he said.

"Probably a little of both, probably a little bit more cash though this time," said Sandy Johnson, a shopper. "Credit crunch, more cash, I don't want anymore debt," added Octavia Singleton.

Plenty of people are living on credit, according to the American Bankers Association. About 75 percent of families have more than one credit card, creating the temptation to charge gifts this holiday season.

If your rates do go up, call your credit card company, experts advise. Don't give up after your first attempt to contact your bank and they tell you, "No, we won't reduce your interest rate." Call back, ask for the supervisor. Persistence can pay off.

Seven on Your Side covered the this topic recently. CLICK HERE for more information.