Getting Icelandic Króna for Your Trip to Iceland

Iceland has a well-earned reputation as one of the world's most expensive destinations. A simple meal can cost £20-30, a beer £10-15, and even a hot dog from the famous Bæjarins Beztu will set you back £6-7. The good news? You won't need to worry about exchanging currency before you go.

Iceland is extremely card-friendly - arguably more so than anywhere else in Europe. Cards are accepted at the Blue Lagoon, remote highland huts, tiny fishing village shops, and unmanned petrol stations in the middle of nowhere. Many businesses actually prefer cards and some refuse cash entirely.

Given Iceland's eye-watering prices, the most important thing you can do is bring a fee-free debit card. A 3% foreign transaction fee on Iceland prices isn't just annoying - it's genuinely expensive. With the right card, you'll at least get the real exchange rate on every purchase.

Best Ways to Pay in Iceland

1. Fee-Free Debit Cards (Essential)

A multi-currency card like Wise or Revolut is the only sensible option for Iceland. You'll use it for absolutely everything, from glacier tours to supermarket runs. These cards offer the mid-market exchange rate with minimal fees - crucial when prices are already astronomical.

2. Credit Cards

Visa and Mastercard are accepted everywhere. If your credit card has no foreign transaction fees, it can be useful for large purchases or rental car deposits. Be aware that car rental companies in Iceland often require a credit card (not debit) for the security deposit.

3. Mobile Payments

Apple Pay and Google Pay are widely accepted in Reykjavik and tourist areas. Connect your fee-free card for convenient contactless payments. Coverage can be spottier in remote areas, so ensure your physical card works too.

4. ATM Withdrawals

ATMs exist at Keflavik Airport, in Reykjavik, and in most towns. However, given that cash is rarely needed, most visitors never use one. If you do, stick to bank ATMs (Landsbankinn, Íslandsbanki, Arion Bank) and always withdraw in ISK.

Using Cards in Iceland

Card acceptance in Iceland is exceptional:

Where Cards Are Accepted

• All shops, restaurants, and cafes
• Tourist attractions (Blue Lagoon, Golden Circle sites)
• Remote highland huts and refuges
• Unmanned petrol stations (PIN required)
• Swimming pools (sundlaugs)
• Public toilets at tourist spots
• Supermarkets (Bónus, Krónan, Hagkaup)
• Farmers markets and small vendors

Important Card Tips for Iceland

• Enable your PIN: Many unmanned petrol stations and automated machines require a 4-digit PIN
• Fuel station pre-auth: Petrol stations often pre-authorize 15,000-20,000 ISK - this is released after you pump
• Always choose ISK: If prompted for currency choice, select Icelandic Króna
• Notify your bank: Let them know you're traveling to avoid blocks (though less common with Wise/Revolut)
• Bring a backup card: In remote areas, you don't want card issues leaving you stranded

Surviving Iceland's Prices

Let's be honest: Iceland is brutally expensive. Here's what to expect and how to cope:

Typical Costs (2026)

• Restaurant meal: £15-30 for a basic main course
• Beer: £10-15 at a bar
• Coffee: £4-6
• Petrol: About £1.60/litre
• Hotel: £150-300+ per night
• Hostel dorm: £40-60 per night
• Blue Lagoon: £80-200+ depending on package
• Hot dog (Bæjarins Beztu): £6-7

Money-Saving Tips

• Self-cater: Shop at Bónus (the pink pig logo) for affordable groceries
• Bring food: You can bring food into Iceland duty-free
• Tap water: Iceland's tap water is exceptional - never buy bottled
• Free hot springs: Skip Blue Lagoon and visit free natural hot springs
• Camp: Camping is much cheaper than hotels
• Lunch specials: Many restaurants offer cheaper lunch deals
• Happy hour: Reykjavik bars have happy hours - drinks are still expensive, but less so

Driving and Fuel in Iceland

Most visitors rent a car to explore Iceland. Here's what you need to know about paying for fuel:

• Unmanned stations: Many stations, especially outside Reykjavik, are unmanned and card-only
• PIN required: You must have a 4-digit PIN enabled on your card
• Pre-authorization: Machines pre-authorize 15,000-20,000 ISK before dispensing fuel
• N1, Olís, ÓB: Main fuel brands - all accept international cards
• Fill up often: Stations can be far apart in remote areas

Tipping in Iceland

Tipping is not part of Icelandic culture - service charges are included in all prices, and workers earn good wages:

• Restaurants: Not expected or customary
• Cafes: No tipping
• Taxis: Not expected (just pay the meter)
• Tour guides: Not expected, but appreciated if exceptional
• Hotels: Not customary

If you insist on tipping for exceptional service, it will be accepted graciously, but it's genuinely not expected.