The US Government just reverted back to the pre-Obama privacy laws, allowing ISPs to track & sell our web histories. Since you are on their network they basically have more information on you than your own parents. ISPs technically know your address, phone numbers, emails, chat IDs, Skype IDs, banking information and everything else there is to know about you. * And it’s not just you, your family, friends, parents and colleagues are all there too.
*-emphasis mine
That's not entirely true...
First of all, the only thing that changed from the ISPs' perspective is that the stricter FCC privacy rule, that would have become effective late in this fall, had been repealed. In another word, the law did not change anything... as of yet. That means the ISPs operate the same way as they've been doing all along.
Second of all, you can retrieve your email securely, even from your ISP's emaill account through SSL/TLS connection. Not much use on your home desktop since the ISP hosts the email server and has access to all of your emails there. Both Skype and banking information are TLS/SSL connection by default, don't know about chat programs, but the chances are that they use SSL/TLS as well. If your ISP utilizes SSL/TLS proxy, or requires the acceptance as such, you should cancel your ISP services. I know I would...
Yes, the ISP will know that you connected to Skype, your bank, etc., but does not know the content. You can use VPN tunnel, Tor, etc., for hiding these addresses, but the ISP still going to get them. Most people use the DHCP settings for their ISP connection, that assigns the address for the DNS servers. The ISP can collect the logs from the DNS server and know the websites you asked the address for and you visited. Using DNSCrypt would eliminate the ISP DNS server footprint for your internet access. The only thing the ISP would know that you've connected to the VPN server address and/or the first Tor node. No other addresses/websites would be visible to them...
You really need to know how the ISP connection works in order to minimize your browser's footprint left behind in their logs. And that's the best you can do, minimize...