Correction to This Article
An earlier version of this article said that Sen. John Kerry (D-Mass.) has introduced an online privacy bill. Kerry is currently drafting such legislation, but has not yet introduced it. This version has been corrected.
Personal Finance: Plumper paychecks

Michelle Singletary
Thursday, January 20, 2011; 12:10 PM

Did you notice your paycheck was a little bigger last week? I'm sure you just couldn't contain your giddiness at the 2 percent decrease in the payroll tax that is making your paycheck plumper.

The Obama administration says that the cut will benefit more than 150 million families. On average, workers will see a take-home pay increase of about $700 a year, the Post reports.

What are you going to do with your extra dough? That was last week's Color of Money Question. Here are some of your responses.

"What plumper paycheck?" wrote Harley B. Rider of Dexter, Mich. "Our gross income has been reduced by almost one percent and, no thanks to an involuntary office relocation, my commuting expenses will cost $2,100 more this year - providing gas prices don't increase at all."

Robert Tate of Indianapolis, Ind. is investing his money.

"I am blessed with an employer that will match contributions dollar for dollar up to six percent. This will be over the matching threshold but I am not used to having it, so I will put it away and not spend it."

Emily Butler of Orlando, Fla. said, "I will spend it, but most likely on necessities like food. On the other hand, it could mean I would not need to withdraw from my savings as much, so in that sense I would save more."

"My daughter will be heading off to college this fall so I will have this extra money transferred to an account for her," says Dana Pace of Decatur, Ga. "If I start it now I will have a little stock pile when she needs it. By having it automatically transferred to an account when I get paid, I won't miss it or spend it."

Like many others, C. Hood Francis of Elizabeth, N.J. says the little extra will go right into savings.

"My ability to save has diminished due to a static salary, increases in the cost of everything - food, clothing, utilities, real estate taxes, and public transportation, and my husband being unemployed for 18 months. This will give me an opportunity to bolster my saving account."

Big Banks Are Watching

Banks are looking at what you buy with your debit card and using that information to tailor ads that you'll find on your online statement, reports the Post's writer Ylan Q. Mui.

It works like this, Mui writes: "The charge for your breakfast at McDonald's might be followed with an offer for 10 percent cash back on your next meal at the Golden Arches. There's no need to print a coupon - just click the link, and the chain will recognize your debit card the next time it is swiped."

The targeted advertising has stirred up much criticism from consumer groups.

"It's definitely troubling," said Justin Brookman, head of consumer privacy issues for the Center for Democracy and Technology. "Most people don't notice them, understand them or opt out from them."

The new marketing practice has also prompted federal action. Sen. John F. Kerry (D-Mass.) has said he plans to introduce an online privacy bill. Controversies about the use of personal online data prompted the Federal Trade Commission to issue guidelines for it.

Here's this week's Color of Money Question: Do you mind if your bank is using your debit card purchases to push products? Send your responses to and put "Big Banks are Watching" in the subject line. Be sure to include your full name, city and state.

Banking Fees

While I'm on the subject of banks, it seems that many of them, still steaming from the passage of sweeping credit card legislation, are introducing new fees, reports New York Times columnist Ron Lieber.

Bank of America is planning to test some monthly fees that would be implemented depending on the customer's balance and relationship with the institution. JPMorgan Chase is adding monthly fees to accounts it inherited from the now-deceased Washington Mutual.

A spokesperson for JPMorgan Chase told Lieber it's the law's fault. The poor bank doesn't want to raise fees but it must. And you know what? Many people will just take the fees they're slapped with and never search for another bank, writes Lieber.

"There is risk for consumers who turn their backs on the banks and their new fees. But most people won't, and the banks know this. Changing checking accounts is a pain. Convenience matters, too, for people who need to deposit cash or have other reasons to lean heavily on a branch."

Just think of what has happened to us with the airline industry. We let them impose fees with nary a complaint. You have to pay extra to book via the telephone. Passengers carry larger items on the plane because they don't want to pay to check another bag. And expect more fees to come, reports New airline fees in 2011 could include charging more for heavier carry-on bags, soft drinks and water, and paying a fee to redeem a free ticket.

The fees keep coming because we just take it, just like we're going take more fees and less service from the banks.

Supermarket Jam

Your local grocery store may be in a bit of a pickle.

David K. Randall of Associated Press reports that high inflation and low profits have forced many grocers to take a financial hit since passing those charges on to recession-weary consumers might cause them to lose customers.

Circling the blood in the water, big retailers such as Target, CVS and Walgreens are adding grocery-store type sections to their offerings, reports the New York Times.

Is this a good thing for you, the consumer? It's convenient, but the retailers have correctly banked on the fact that you might go into the store to just buy milk or fresh vegetables but will wander into other aisles and end up spending much more than you intended.

Tia Lewis contributed to this e-letter.

You are welcome to e-mail comments and questions to Please include your name and hometown; your comments may be used in a future column or newsletter unless otherwise requested.

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