When kids get their first credit card, it’s vital to make sure they understand how important it is to pay that bill on time. Not only does it affect your credit score, it also costs you a late payment fee. With diligence and the right information, penalties are easy to avoid. That’s why it’s good to be aware of these two penalties so they don’t sneak up on you.

Part B late enrollment penalty

Some people are automatically enrolled in Medicare Part B, while others have to sign up. In most cases, if you don’t sign up for Part B when you’re first eligible, you’ll have to pay a late enrollment penalty for as long as you have Part B.

Whether you stick with Original Medicare only or choose to buy a private Medicare plan, you must continue to pay your Medicare Part B premium each month. Your premium is based on your income. The government sets these amounts each year, which means they may change from one year to the next. If you get hit with the late enrollment penalty, your premium may go up 10 percent for each full year that you could have had Part B, but didn’t. That means you can get hit more than once! Visit medicare.gov to see what your Part B premium is.

Part D penalty

The government requires everyone on Medicare to have creditable prescription drug coverage (Part D coverage that’s at least as good as Medicare’s standard).

Let’s say you’re about to turn 65 and become eligible for Medicare. As long as you sign up for Part D coverage that meets Medicare’s standards, you’re in the clear. If you go without creditable prescription drug coverage for 63 days in a row (or more) after you sign up for Medicare, you may have to pay a late enrollment penalty. This penalty is added to your monthly Part D premium and you’ll have to pay it for as long as you have a Medicare drug plan.

The easiest way to avoid this penalty?

You can simply sign up for a Part D plan or find a private plan that offers prescription drug coverage when you sign up for Medicare. To learn more, visit medicare.gov or talk to a Medicare expert you trust.

Related content: Signing up for Medicare at 65

Unlike a one-time fee for a late payment on your credit card, these penalties last forever! Take the time to make sure you don’t get dinged. The graphic below sums up these penalties and offers tips for avoiding them.

Need help paying for coverage?

If you’re delaying enrollment in Part B and/or Part D because you can’t afford it, check to see if you qualify for help.

The Medicare Savings Programs and Extra Help program can provide financial help for various health care or prescription drug costs. Your income and assets determine if you’re eligible. Assets include cash, savings and investment and vacation property.

Medicaid (called Medical Assistance in Minnesota) can help pay for Medicare premiums, deductibles, copays and/or coinsurance. Medicaid may cover services Original Medicare doesn’t. For example, Medicaid can cover care in a designated nursing facility if you don’t have money, assets or long-term care insurance to pay for it.

You may be dual eligible for Medicare and Medicaid and get a plan at reduced costs. In Minnesota, this type of plan is called Minnesota Senior Health Options (MSHO). For no monthly premium, dual Medicare and Medicaid coverage can include medical, prescription drugs, dental, long-term care and other benefits and services.

Related content: Can I get help paying my Medicare costs?