Currency In Iceland
The Complete Guide
Visiting Iceland is a fantastic experience.
You'll experience natural wonders that are unlike anywhere else on earth.
But, like any holiday, things come at a cost, and you need to be prepared.
In this guide, we're going to help you make sure that you know everything you need to about the currency in Iceland.
We'll cover everything, including:
- What currency does Iceland use?
- Can you spend other currencies in Iceland?
- Best places to exchange currency in Iceland
- Whether you should use cash or card
- How to be eligible for tax-free shopping
- The average cost of goods
- Money-saving tips
By the time you've read this guide, you should be feeling confident that you've got the financials of your holiday covered.
Without further ado, let's jump into the guide.
You can use the table of content below to navigate quickly to a section you're interested in.
What currency does Iceland use?
The official currency of Iceland is the Icelandic króna (ISK).
As of the 17th December 2019, a single United States Dollar is worth 122.72 Icelandic Króna.
During your stay in Iceland, you may see price lists, or hear shopkeepers mention “crowns”, rather than “króna”. There’s no need to worry - they're the same thing and the two names are sometimes used interchangeably.
Icelandic króna coins are available in 1,5, 10, 50, and 100. Notes are available in 500, 1.000, 2.000, 5.000, and 10.000.
Interestingly, Iceland is the second smallest country to have its own currency.
Note the period rather than a comma in prices
As you can see above, there is a period instead of a comma (1.000 vs. 1,000) in longer numbers. This is the way prices are displayed in Iceland.
In Iceland, prices are almost always displayed as a whole number, and any commas or periods in there is to help you read it more easily.
Spending other currencies in Iceland
A common question travelers have is whether they can spend their US Dollars, Euros, or other common currencies in Iceland.
There are no guarantees that an Icelandic business will accept currency other than Icelandic króna.
Places regularly visited by tourists such as restaurants, bars, hotels, or tour operators are the most likely to accept foreign currencies, but you should never count on them taking anything other than the local ISK.
If they do accept other currencies, it's likely that you'll get an unfavorable exchange rate and would be better off paying by Icelandic króna or using your credit or card.
To avoid any problems you may have with payment, we'd recommend always carrying your credit or debit card, as well as some ISK in cash.
Where should you exchange currency in Iceland?
The first important thing to note is that there is no Bureau de Changes in Iceland.
In other countries, you can often find these as you're wandering through town centers, but this won't be the case in Iceland.
If you're arriving in Iceland by plane, we'd recommend spending a few minutes at Keflavík International Airport (KEF) after you land. Arion Bank is conveniently located in the arrivals hall (as well as another desk in the departures hall), and you'll be able to exchange your currency here.
If you're in a hurry to leave the airport or want to avoid the queues, you can pre-order your currency exchange, and it can be ready for collection within as little as four hours.
If you'd prefer to head straight into Reykjavík, then you'll still be able to exchange your currency in the city center.
As I mentioned above, there is no Bureau de Changes, but you can go to regular banks during their opening hours and have your currency exchanged on the spot.
We would recommend exchanging all of the currency you need for your stay before leaving Reykjavík. In more rural areas, you're less likely to find banks, and it's always safer to be prepared.
In the next section, you'll see several banks in Reykjavík that offer currency exchange services:
Where to exchange foreign currency in Reykjavík
- Kringlan 8-12, 103 Reykjavík, Iceland
- Bíldshöfði 20, 110 Reykjavík, Iceland
- Hagatorg, 107 Reykjavík, Iceland
Do most places in Iceland accept credit or debit cards?
You'll be happy to hear that Iceland is extremely card-friendly.
Nearly every shop, tour operator, restaurant, bar, taxi, or coffee shop will accept payment by card, and it's by far the most popular payment method in the country.
Locals use chip and pin cards for almost everything.
If you don't have a card that allows for chip and pin payment, you'll be able to sign for your purchase.
Nearly every business accepts cards, but it still doesn't hurt to have some ISK cash on hand. Like in any other country, problems with card readers or issues with the VISA or Mastercard networks could lead to cards not working.
Keep in mind that your bank may impose a foreign transaction fee, and you may be charged a small percentage on top of the retail price.
Can I use AMEX in Iceland?
As anyone with an American Express (AMEX) card knows, not every merchant accepts them, and the same applies to Iceland.
Many places in Iceland will accept AMEX, particularly if they're well established or busy.
For example, you'll rarely have a problem paying with AMEX at:
- Popular restaurants
But, if you're off the beaten path in rural Iceland and come across a small store, don't be surprised if they don't take American Express cards.
Best prepaid card to use in Iceland
Another popular option with travelers is to use a prepaid card.
A prepaid VISA Currency Card will work well, as everywhere that accepts VISA payments in Iceland will accept it.
You also won't need to worry about added foreign transaction fees on your card, so you might be able to save some money compared to using your usual bank card.
Apple Pay and Google Pay in Iceland
As Apple pay and Google Pay are growing in popularity, more and more retailers in Iceland are accepting them.
In Reykjavík, you'll likely be fine using Apple and Google Pay, but be aware that smaller stores and those in rural areas may not be accepting them.
We'd recommend always having a backup payment method such as a Mastercard, Visa, or some Icelandic króna.
ATMs in Iceland
Even though Iceland is almost a cashless society, it doesn't hurt to have some króna in cash.
Luckily, there are ATMs all over Reykjavík, and there are several ATMs within Keflavík Airport so you can withdraw your money as soon as you arrive.
Is tipping expected in Iceland?
A common question is whether you should tip in Iceland or not.
Like in many other European countries, Iceland has labor laws that ensure workers receive fair wages and won't need to rely on tips.
Tipping isn't common practice among locals, and you won't be expected to tip the staff. However, it can definitely be a nice gesture, particularly to those in hospitality and tourism-related jobs.
Am I eligible for Tax-Free Shopping in Iceland?
If you're a non-Iceland resident, the answer is yes.
Iceland's Directorate of Customs allows all non-Iceland residents to be eligible for tax refunds, as long as the minimum amount on a receipt is ISK 6.000 or above (approximately $49).
You'll be able to receive up to 14% discount with your tax-free shopping.
When making a payment in store, you simply need to ask for a tax-free form, and the shop will provide you with one that you'll need to complete to receive your tax refund.
Once you're at Keflavík Airport with your purchases, receipts, and tax-free forms, you'll need to have them stamped and validated.
If your purchases are between 6.000 and 100.000 ISK, then you can have them stamped by Arion Bank. Any purchase that costs more than 100.000 ISK should be stamped by customs.
This should be completed before you check-in to your departing flight.
If you're staying in Iceland for an extended period, then you may not be eligible for tax-free shopping. You have to leave Iceland with your purchases within 3 months of the date of purchase to be eligible for tax-free shopping.
If you aren't leaving from Keflavík Airport, you can still quickly get your tax refund. If you're departing from Reykjavík Airport, leaving on a boat, cruise ships, private plane, or another mode of transport, then customs officers will make sure to clear you before departure.
You'll have the chance to have your tax refunds approved as long as you have the receipts and items in their original purchase state.
Your tax refund will usually be handed out in Iceland króna that you can exchange back into your local currency.
How much do things cost in Iceland?
Iceland has a reputation for being expensive, and if you're visiting from almost anywhere in the world, you'll find this to be true.
The best way to prepare is to have an idea of what things actually cost in Iceland so you can plan accordingly.
Let's take a look at some numbers from Numbeo's cost of living index.
Food and Drink Prices in Iceland
|Items||Average Price in ISK (kr)||Price in USD ($)|
|Meal for 1 Person, Inexpensive Restaurant||2,464.40 kr||$20.08|
|Meal for 2 People, Mid-range Restaurant, Three-course||12,750.00 kr||$103.67|
|Water (1.5-liter bottle)||223.18 kr||$1.82|
|Milk (regular), (1 liter)||161.89 kr||$1.32|
|Local beer (0.5L)||1,200 kr||$9.76|
Transportation Prices in Iceland
|Items||Average Price in ISK (kr)||Price in USD ($)|
|One-way Ticket (Local Transport)||470.00 kr||$3.83|
|Taxi 1km (Normal Tariff)||300.00 kr||$2.44|
|Gasoline (1 liter)||223.20 kr||$1.82|
If you're planning to head out of Reykjavík, then you may be renting a car.
If so, we'd highly recommend arranging your car rental in advance of arriving in Iceland as you'll be more likely to get the best price. You can get prepared with our guide to renting a car in Iceland.
How to Save Money in Iceland
As mentioned above, Iceland is an expensive holiday destination.
But don't let the initial numbers put you off.
There are some viable ways to cut costs and save money in Iceland, like in any other holiday destination.
Here are some of our best money-saving tips:
1. Bring a reusable water bottle
As well as being an environmentally friendly choice, bringing your own reusable water bottle will save you money during your stay in Iceland.
If you're going on day or multi-day trips outside of Reykjavík, you should be prepared, and having water is essential.
Icelandic tap water is entirely safe to drink, so you'll be able to fill up your bottle before you go and save yourself the cost of buying one.
2. Stay at a campsite, hostel, or motorhome instead of a hotel
There's no shortage of hotels in Iceland. Despite their convenience, they can quickly eat away at your holiday budget.
If you're happy trying something different, then consider staying at a campsite, hostel, or renting a motor home instead.
There are some beautiful campsites around Iceland, and they'll be significantly cheaper than any hotel. Most have great facilities, and they're all perfectly safe. Before booking your stay, we'd recommend reading reviews to find the ideal campsite for you.
Another popular option is to stay in a hostel. They're usually half the price of a hotel (or even less) which will save you a considerable amount of money.
Finally, if you want to try something different, why not rent a motorhome? It's a unique way to explore the country and doubles up as a comfortable place to stay. If you're considering this, make sure to check out our guide to motorhome camping in Iceland here.
3. Book your rental car in advance
As we mentioned above, it's worth book your rental car in advance to get the best deals. As well as that, you can save money on your car rental by visiting at specific times of the year.
We collected data from approx. 30,000 rental car bookings and found that average car rental prices are cheapest in February, March, and November.
4. Buy alcohol in the airport duty-free section
When you land in Keflavík Airport, you'll have an opportunity to go through duty-free on the way out of the airport.
Alcohol is notoriously expensive in Iceland, and even locals will stock up before leaving.
5. Go to restaurants for lunch instead of dinner
If you're eager to eat at local restaurants but don't have a big budget, consider going for lunch rather than dinner.
Restaurants will often offer lunchtime specials that can come in at about half the price of what you'd pay at dinner.
We hope this guide has helped you get to grips with the currency in Iceland, popular payment methods, how much money you'll need to take, and any other questions you have about spending in Iceland.
There's no doubt that Iceland is slightly more pricey than your average holiday destination, but there are still some great ways to save money, as you've seen above.
While all the numbers in this guide are up-to-date at the time of publishing, we'd recommend checking the strength of your currency compared to the Icelandic króna as you're about to visit.