Planning a trip to Iceland and wondering what currency Iceland uses? You’re not alone. One of the most common questions first-time visitors ask is whether Iceland uses the euro, whether they need to bring cash, and which credit cards work in Iceland.
The official currency of Iceland is the Icelandic króna, usually written as ISK or kr. Iceland does not use the euro, and foreign currencies such as US dollars, British pounds and euros are not commonly accepted.
The good news? Paying for things in Iceland is very straightforward. Credit and debit cards are accepted almost everywhere, and many travelers can explore Iceland without using cash at all.
In this Iceland currency guide, we cover everything you need to know about money in Iceland, including Icelandic króna denominations, exchange rates, cash, credit cards, ATMs, tipping and practical ways to save money during your Iceland road trip.
image via Flickr user: A.Currell
What Currency Does Iceland Use?
The official currency in Iceland is the Icelandic króna (ISK).
The singular form is króna, while the plural is krónur. You will normally see prices displayed using either kr or ISK.
For example:
- 1,000 ISK
- 5,000 kr
- 10,000 ISK
Both refer to Icelandic króna.
Iceland is part of the European Economic Area (EEA) and the Schengen Area, but it is not a member of the European Union and is not part of the eurozone. Therefore, the euro is not Iceland’s official currency.
Icelandic Króna Notes and Coins?
There are currently five Icelandic banknote denominations:
- 500 ISK
- 1,000 ISK
- 2,000 ISK
- 5,000 ISK
- 10,000 ISK
Icelandic coins are available in:
- 1 ISK
- 5 ISK
- 10 ISK
- 50 ISK
- 100 ISK
If you don’t see much Icelandic cash during your trip, don’t be surprised. Card and contactless payments are extremely common throughout the country.
Does Iceland Use the Euro?
No. Iceland does not use the euro.
The Icelandic króna is Iceland’s official currency. While you may occasionally find a tourism-related business willing to accept euros or another foreign currency, you should not rely on this.
Prices will normally be displayed in Icelandic króna, and paying by credit or debit card is generally much easier than carrying euros or US dollars.
If you’re arriving from a eurozone country, there is therefore usually no need to exchange a large amount of euros into cash before your trip.
Can You Use US Dollar in Iceland?
US dollars are not commonly accepted as payment in Iceland.
Some tourism businesses may choose to accept foreign currency, but this isn’t something travelers should expect. Even if a business accepts dollars or euros, the exchange rate offered may not be as favorable as paying directly in Icelandic króna with your card.
For most travelers, the simplest approach is to pay by card and allow the transaction to be processed in ISK.
Cash or Card: How Should You Pay in Iceland?
Iceland is a very card-friendly destination. Credit and debit cards are accepted almost everywhere, including:
- Restaurants and cafés
- Supermarkets
- Petrol stations
- Hotels and guesthouses
- Tourist attractions
- Car rental locations
- Shops
- Swimming pools
- Many other services
Contactless payment is also widespread.
Because of this, most tourists do not need to carry large amounts of cash in Iceland.
Having a small amount of Icelandic króna can still be useful as a backup, particularly when traveling around the country, but it isn’t essential for most trips.
Can You Use Apple Pay and Google Pay in Iceland?
Mobile and contactless payments are widely used in Iceland, and many businesses accept services such as Apple Pay and Google Pay wherever compatible contactless card payments are available.
It’s still sensible to carry a physical credit or debit card as a backup.
Which Credit Cards Are Accepted in Iceland?
Visa and Mastercard are the safest options for travelers visiting Iceland and are widely accepted.
American Express has more limited acceptance, so if you’re traveling with an AMEX card, bring a Visa or Mastercard as a backup.
You should also make sure you know your card’s PIN, particularly if you plan to rent a car and drive around Iceland. Some payment terminals and self-service facilities may require a chip-and-PIN transaction.
Before traveling, check whether your bank charges:
- Foreign transaction fees
- International ATM fees
- Currency conversion fees
Using a travel-friendly card with low or no foreign transaction fees can help reduce unnecessary costs.
Should I Choose ISK or My Home Currency When Paying?
When a payment terminal gives you the option to pay in Icelandic króna (ISK) or your home currency, check the exchange rate and fees carefully.
Choosing your home currency may involve dynamic currency conversion (DCC), where the merchant or payment provider converts the transaction for you.
This can include a different exchange rate or additional fees.
In many cases, allowing your own bank or card provider to handle the currency conversion by paying in ISK can be the better option. However, always check your card provider’s fees and terms.
What is the Iceland Currency Exchange Rate?
The value of the Icelandic króna changes against currencies such as the US dollar, euro and British pound.
Because Iceland currency exchange rates fluctuate, it’s better to check the current exchange rate shortly before or during your trip rather than relying on an old conversion from a travel guide.
Your bank or card provider may also use a slightly different rate and add transaction or conversion fees.
A useful budgeting trick is to save an approximate ISK-to-your-home-currency conversion on your phone before traveling. That makes it much easier to understand prices while shopping, eating out or stopping for fuel during your Iceland road trip.
Where Can You Exchange Money in Iceland?
If you want Icelandic cash, you have several options.
You can withdraw Icelandic króna from ATMs, and ATMs are available in Reykjavík, at Keflavík International Airport and in towns around Iceland.
Currency exchange services are also available through Icelandic banks and at selected locations.
For most travelers, however, exchanging large amounts of cash isn’t necessary because card payments are so widely accepted.
Should You Exchange Money Before Traveling to Iceland?
Usually, no.
Most international visitors can arrive in Iceland with a suitable credit or debit card and use it for the majority of their trip.
If you’d like some cash as a backup, you can withdraw Icelandic króna after arriving.
Check your bank’s international withdrawal fees before using an ATM, as these vary between banks and cards.
How Much Do Things Cost in Iceland?
Iceland has a reputation for being an expensive travel destination, but your total Iceland travel budget depends heavily on when you visit, where you stay, how you eat and how you travel.
Instead of relying on fixed prices that can quickly become outdated, divide your Iceland budget into the main categories:
Accommodation
Hotel and guesthouse prices vary considerably between seasons. Summer is generally one of the busiest periods, so booking accommodation early can give you more choice.
Hostels, guesthouses and accommodation with shared facilities can be useful for travelers looking to reduce costs.
Food
Eating at restaurants for every meal can quickly increase your Iceland travel costs.
Buying breakfast, snacks and simple meals from supermarkets is an easy way to save money, especially on a road trip.
And don’t forget to try Icelandic supermarket favorites such as skyr.
Activities
Some of Iceland’s most famous natural attractions can be explored independently, making a self-drive holiday a good option for travelers who want flexibility over their budget.
Paid activities such as glacier tours, whale watching, geothermal lagoons and ice cave tours should be booked into your travel budget separately.
Car Rental
The cost of renting a car in Iceland depends on several factors, including:
- Travel dates
- Vehicle type
- Rental duration
- Availability
- Insurance and protection options
- Whether you need a 2WD or 4×4
Booking your Iceland rental car early can give you a wider choice of vehicles, particularly during busy travel periods.
Do You Tip in Iceland?
Tipping is not expected in Iceland.
You don’t need to calculate a standard 10%, 15% or 20% tip when visiting restaurants, cafés, bars or taking tours.
If you receive particularly good service and would like to leave a tip, you can, but it is completely optional.
So if you’re visiting from the United States or Canada, where tipping is much more common, don’t worry about adding a percentage to every bill during your Iceland trip
How to Save Money When Visiting Iceland
Iceland doesn’t have to destroy your travel budget. A little planning can make a significant difference.
1. Book Your Trip Early
Flights, accommodation, activities and car rentals in Iceland can become more limited during busy periods.
Booking early gives you more options when comparing accommodation and rental vehicles.
2. Shop at Icelandic Supermarkets
You don’t need to eat every meal at a restaurant.
Buying breakfast supplies, sandwiches, snacks and simple meals at supermarkets can significantly reduce your food budget.
Supermarkets such as Bónus are popular with budget-conscious travelers.
If you’re renting a car, stock up before longer driving days so you’re not dependent on restaurants along your route.
3. Bring a Reusable Water Bottle
Here’s one of the easiest Iceland money-saving tips: don’t keep buying bottled water.
Iceland’s tap water is safe to drink and widely available. Bring a reusable bottle and refill it throughout your road trip.
4. Travel Outside the Busiest Summer Period
Traveling outside peak summer can sometimes mean better availability for accommodation and rental cars.
Autumn, winter and spring also offer completely different Iceland experiences, including the possibility of seeing the Northern Lights during the darker months.
5. Rent a Budget-Friendly Car
Your rental car doesn’t need to be brand new to take you on an unforgettable Iceland road trip. At Firefly Iceland, we use older-model rental cars to offer travelers a more budget-friendly way to explore Iceland.
Choose a vehicle that suits your route, number of passengers and luggage rather than automatically booking the largest option available.
Paying for Fuel During an Iceland Road Trip
If you’re planning to rent a car in Iceland, your payment card becomes particularly important.
Fuel stations are available throughout Iceland, but outside Reykjavík and larger towns, you may encounter unmanned self-service stations.
Make sure you have a working payment card and know your PIN before starting your road trip.
It’s also a good idea to refuel when you have the opportunity when traveling through less populated areas rather than waiting until the tank is nearly empty.
Iceland Currency FAQs
- What currency is used in Iceland?
The official currency of Iceland is the Icelandic króna, abbreviated as ISK and commonly shown using the symbol kr.
- Does Iceland use euros?
No. Iceland does not use the euro. Iceland has its own currency, the Icelandic króna (ISK).
- Is Iceland in the EU?
No. Iceland is not a member of the European Union. It participates in the European Economic Area (EEA) and is part of the Schengen Area.
- Can I pay with euros in Iceland?
You should not rely on being able to pay with euros in Iceland. Foreign currencies are rarely accepted. Paying by card in Icelandic króna is generally the simplest option.
- Can I use Us dollars in Iceland?
US dollars are not commonly accepted. Use an international credit or debit card or Icelandic króna instead.
- Do I need cash in Iceland?
For most trips, no. Iceland is highly card-friendly, and credit and debit cards are accepted almost everywhere. You may still want a small amount of Icelandic cash as a backup.
- Can I use a credit card everywhere in Iceland?
Credit and debit cards are accepted at the vast majority of businesses. Visa and Mastercard are particularly widely accepted. Carrying a physical card and knowing your PIN is recommended.
- Is Apple Pay accepted in Iceland?
Contactless payments are widespread, and Apple Pay can be used at many businesses with compatible payment terminals. Carry a physical payment card as a backup.
- Are there ATMs in Iceland?
Yes. ATMs are available in Reykjavík, Keflavík International Airport and towns around Iceland. Check your bank’s international withdrawal fees before using one.
- Should I exchange money before going to Iceland?
It generally isn’t necessary. Most travelers can use a credit or debit card throughout their trip and withdraw a small amount of ISK from an ATM if needed.
- Should I pay in ISK or USD when using my card?
If you’re offered a choice between ISK and your home currency, compare the exchange rate and fees. Paying in ISK allows your card provider to perform the currency conversion and can help you avoid potentially unfavorable dynamic currency conversion rates.
- Is tipping expected in Iceland?
No. Tipping is not expected in Iceland. You can leave a tip for excellent service if you want to, but there is no standard percentage you are expected to pay.
- What is the best way to pay for things in Iceland?
For most international visitors, a Visa or Mastercard credit or debit card is the most convenient option. Keep a physical card with you, know your PIN and check your bank’s foreign transaction fees before traveling.
Conclusion: What You Need to Know About Money in Iceland
Paying for things in Iceland is easier than many first-time visitors expect.
The official currency of Iceland is the Icelandic króna (ISK), not the euro. Although cash is available and easy to withdraw, most travelers can pay for almost everything using a credit or debit card.
Before your trip, make sure you have a card that works internationally, know your PIN and check your bank’s foreign transaction and ATM fees. You don’t need to exchange large amounts of money in advance, and tipping isn’t expected.
Once the money questions are sorted, you can focus on the fun part: planning your Iceland road trip.
Want to explore waterfalls, black sand beaches, geothermal areas and small Icelandic towns without spending more than you need to? Rent a cheap car in Iceland with Firefly and discover the Land of Fire and Ice at your own pace.
