Is It Better to Use Cash or Card in Iceland?


Whether a person is traveling to Iceland for a short period of time or a long period of time, it’s always good to plan ahead with regard to how to handle money. One of the first questions that comes to a traveler’s mind is often if it’s better to use a cash or card while visiting the island nation. 

It is best to use cards while traveling in Iceland. Like other Scandinavian countries, Iceland’s businesses, and especially their tourism industry, is accommodating to card use because it’s what most travelers prefer to use. The majority of restaurants, hotels, and transportation services accept cards.

The information below provides more details on handling money, including credit cards, in Iceland. Planning ahead will help travelers not encounter obstacles while on the island and ensure a relaxing, trouble-free experience.

Credit Cards and Debit Cards Use in Iceland

Many travelers like to use cards because they are easy to carry, easy to cancel if they are lost or stolen, and some like to collect reward points for various purposes. Some card companies are more common than others, and so some are accepted at more locations than others. 

Common credit cards accepted in Iceland: 

  • VISA card
  • MasterCard

Although these cards are accepted at most banks and businesses in Iceland, a person must have a 4-digit pin for most purchases and ATM transactions.

Although pins are not required for all purchases, transactions for gasoline or many businesses will require a person to insert a pin number when using a card.

Pin numbers are easily acquired from card companies, banks, or whatever institution issued the card.

Some transactions may also require a signature. Other transactions may require a zip code as well.

Debit Cards

Many travelers find that debit cards are especially useful for getting money from an ATM machine. It’s often less expensive to get money from an ATM using a debit card as opposed to a credit card.

Taking money out of an ATM with a debit card often comes with a fee. Taking money out of an ATM with a credit card often includes a high rate of interest.

Debit Cards commonly accepted in Iceland: 

Debit Cards Accepted at BusinessesAcceptance at banks and/or ATMs
Visa CardAccepted at all banks and ATMs
MasterCardAccepted at all banks and ATMs
Diner’s ClubNot as popular, but generally accepted at all banks and ATMs
JCBAccepted at Kreditkort, Ormolu
American ExpressNot as popular as others
Electron (Card)Accepted at all banks and ATMs
Maestro CardAccepted at all banks and ATMs
EDCAccepted at all banks and ATMs
Cirrus and Euro Cheque (ATM-only cards)Accepted at all banks and ATMs
Diner’s club and JCB cardholders with Cirrus acceptanceAccepted at all banks and ATMs

Similar to many credit cards, ATMs require a 4-digit pin to withdraw money. For emergencies, if a person plans to only take cards and no cash, a debit card is a good option to withdraw money more easily than credit cards. 

Common places that accept cards

At most businesses, a card is convenient and welcoming. There are not many places where cash is needed exclusively. At the businesses listed below, credit or debit cards are commonly accepted:

  • Restaurants 
  • Restaurants
  • Gas stations 
  • Souvenir shops
  • Hotels
  • Transportation services

Using Cash in Iceland

In Iceland, the currency is not the Euro, but the Icelandic Krona. The abbreviation of the Krona currency is ISK, which travelers may see on printed material or online.

Some travelers realize after arriving in Iceland that some items and experiences are more expensive that they assumed. It is best to plan ahead, especially if one is traveling on a budget. Travelers can prepare, in part, by calculating the difference between their currency and the Krona by visiting sites such as the following Currency Converter. [1]

Kronur

Generally, Kronur (plural) cash comes in forms of coins of 1,5,10,50, and 100 kronurs and the notes (or bills) come in 500, 1000, 2000, and 5000 kronurs.

Although cards are widely accepted in Iceland, many travelers find that it is smart to carry a few cash notes. Whether a person wants to withdraw money in Iceland or prior to their arrival, there are a few circumstances where they may be convenient.

For example, if a person is going to rural locations, they will want to bring cash just in case individual providers of goods or services are not equipped to receive cards.

ATM locations

If a person wants to withdraw money from an ATM once they are in Iceland, they can do so at the Keflavik Airport reception area where ATMs are located. 

In the bigger cities and in general tourist areas, people will easily find ATMs, but it will be harder to find them in rural and remote areas.

Other Places Where Cash May be Necessary

As mentioned, there will be some places and situations you will need cash. 

  • Most Public Restrooms
  • Emergencies
  • Hot Springs
  • Gas stations

Though some travelers to Iceland come from countries in which public restrooms are free to use, there are many places in the world, including Iceland, where the user is charged a small fee. Fees go to keeping public restrooms safe and clean. [2]

Some public restrooms in Iceland accept cards, but some only accept cash. If travelers are taking long day trips, it would be smart to have some coins in their pocket. [3]

Traveler’s Check

Traveler’s checks are accepted in certain places such as banks, major hotels, and tourist centers. 

Foreign Transaction Fee

If a person is going to resort to using cards for the majority of their purchases, a good tip for international travel is to limit their trips to the ATM as much as possible.

Each withdrawal will require a foreign transaction fee from the ATM on top of the currency exchange rate. For this reason, some people like to take cash from the local bank at home by ordering it ahead of time and being attentive to the exchange rate. 

What is a Foreign transaction fee? 

This is a transaction fee that can range from 1 to 3% of any purchase abroad.

Banks generally use this money to convert the transaction amount to U.S. dollars (or local currency). This is a fee for this conversion and therefore adds onto the exchange rate as well. 

As in any international travel, if a person plans to use a credit card, they will want to review what bank provides that for international travel. 

Although foreign transaction fees have been a standard and quite common for many years, many credit card companies are eliminating this fee. 

For certain cards, there are also benefits for travel and dining, but of course, for others, quite the opposite. 

Common issuers that have eliminated the foreign transaction fees: 

  • Pentagon Federal Credit Union 
  • Capital One
  • USAA
  • Discover
  • HSBC

It’s important to note, however, that foreign transaction fees differ from ATM withdrawal fees. This could vary depending on the ATM and a person’s bank, and whether or not they may be affiliated with each other. This means additional cost. 

If a person has a fee-free card, they can use it for purchasing instead of withdrawing frequent amounts of cash from an ATM.  

Common percentages of most-used issuers 

IssuerTotal Fee
American Express2.7%
Bank of America3%
BarclayCard3%
Chase3%
Citi3%
Wells Fargo3%

Source: CreditCards.com [4]

Safe Travels!

In general, you can have a fun and safe trip to Iceland with your credit or debit card and some emergency cash in your back pocket. Bon, voyage!

Additional Source: Iceland Nordic Visitor

References:

[1] https://www.xe.com/currencyconverter/

[2] https://icelandtrippers.com/currency-money-in-iceland/

[3] https://www.frommers.com/destinations/iceland/planning-a-trip/money

[4] https://www.creditcards.com/credit-card-news/what-is-foreign-transaction-fee/

Also see:

https://iceland.nordicvisitor.com/travel-guide/information/paying-by-cards-travellers-cheques/

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