Iceland has become a hugely popular travel destination over the last few years, and for good reason. From the Northern Lights to the Blue Lagoon, Iceland offers a unique travel experience.
If you’re planning a trip to Iceland, you might wonder, “what currency does Iceland take?” This article is your comprehensive guide to understanding money in Iceland and how to get the most from your travel budget.
The official currency is the Icelandic Króna (ISK). However, you might be surprised to learn just how common card payments are. We will also give you tips on how to save money while traveling in Iceland.
What is the Icelandic Króna (ISK)?
The Icelandic Króna (ISK) is the official currency of Iceland. The country introduced it in 1874.
Compared to currencies like the U.S. dollar, the British pound, or the euro, the ISK is relatively weak.
Icelandic Króna notes come in the following denominations:
- 500
- 1,000
- 2,000
- 5,000
Icelandic Króna coins come in these denominations:
- 1
- 5
- 10
- 50
- 100
Cash vs. card: Payment options in Iceland
So, you know that Iceland uses the króna as its currency. But how are you actually going to pay for things when you’re visiting?
Credit and debit cards
The good news is that credit cards and debit cards are widely accepted throughout Iceland. You’ll probably have the best luck with Mastercard and Visa, but other cards can work in some situations, too. American Express and Diners Club may not be accepted everywhere, though.
Contactless payments are common in Iceland, which makes paying for things even more convenient.
The role of cash
Even though cards are widely accepted, it’s a good idea to have some cash on hand. Cash can be useful for smaller purchases, like tipping your taxi driver or buying something from a vendor at a flea market. Some vendors may prefer cash, so it’s always a good idea to be prepared.
Even if you plan to use your credit or debit card for most purchases, it’s a good idea to carry some króna with you just in case.
Understanding Exchange Rates
Exchange rates are always changing, so it’s good to check them before you travel. Here are some approximate values to give you an idea:
- US Dollar (USD) to Icelandic Króna (ISK): $1 USD is usually around 135-140 ISK.
- Euro (EUR) to Icelandic Króna (ISK): €1 EUR typically trades for 143-155 ISK.
For the latest numbers, use an online currency converter or a reliable app. Many Icelandic banks have currency converter tools on their websites, so it’s a good idea to bookmark one before your trip.
Getting Icelandic Króna: Before and During Your Trip
So, you’re headed to Iceland! While credit and debit cards are widely accepted, having some Icelandic Króna (ISK) on hand can be useful, especially for smaller establishments or in more rural areas. Here’s how to get your hands on some:
Exchanging Currency Before Arrival
Before you leave home, you can often purchase ISK online through services like Travelex. You may even find a better exchange rate by buying in advance. Another option is a Travelex Money Card, which allows you to load currency onto a prepaid card.
Exchanging Currency in Iceland
Once you arrive in Iceland, you can exchange currency at banks, certified financial institutions, or the airport. However, since card payments are so common, you probably only need a small amount of ISK — maybe 1,000 to 5,000 ISK — before you go.
Managing Expenses: The Cost of Travel in Iceland
Before you book that trip to Iceland, be aware that it’s not a cheap destination. In general, food and lodging are going to be pricier than in many other European countries.
Here are a few examples of what you might expect to pay:
- A casual meal at an inexpensive restaurant: 2700 – 4100 ISK (20 – 30 USD)
- A three-course dinner for two at a mid-range restaurant: 10000 – 16000 ISK (75 – 120 USD)
- A loaf of bread: around 440 ISK (3 USD)
- One kilogram (2.2 pounds) of local cheese: around 1824 ISK (12.70 USD)
Keep in mind that prices may fluctuate depending on the season, location, and specific establishment.
Saving Money in Iceland: Tips and Tricks
Iceland can be an expensive place to visit, but there are ways to save money:
- Shop at local grocery stores. Chains like Krónan, Bónus, and Nettó are more affordable than convenience stores.
- Skip the bottled water. Iceland’s tap water is safe and delicious.
- Pack your lunch. If you’re planning a long day trip, bring your own food.
- Rent an apartment. Look for accommodations with kitchenettes or full kitchens.
- Travel during the off-season. You’ll find better deals in the fall, winter, and spring.
- Rent a car. Exploring Iceland by car is cheaper than taking tours.
- Avoid taxis. They’re very expensive!
- Buy alcohol at the airport. The duty-free shop has much better prices.
- Use public Wi-Fi. Save on data charges by using free Wi-Fi hotspots.
- Visit free attractions. Iceland has tons of beautiful, free outdoor spaces.
- Go camping. If you’re visiting in the summer, consider camping to save on accommodation.
- Book in advance. Reserve your rental car well ahead of time, especially if you’re traveling in February, March, or November.
Tax-free and duty-free shopping in Iceland
As a tourist, you can often get a VAT refund on purchases you make in Iceland. If you spend more than 6000 ISK at a store, you can ask for a tax-free form. You’ll need to present this, along with your purchases, at customs when you leave the country.
Keflavik International Airport also has a duty-free store where you can buy alcohol, tobacco, and other goods without paying Icelandic taxes.
The standard VAT rate in Iceland is 24%, although some goods, like books and food, have a lower rate.
Paying for Fuel
Most gas stations in Iceland are automated. You’ll usually pay at the pump before you fill your tank. Almost all Icelandic gas stations accept major credit and debit cards, so paying for fuel is simple, even in remote areas.
Fun Facts About Icelandic Banknotes
Icelandic banknotes aren’t just pieces of paper; they’re tiny history lessons. Each bill features a prominent figure from Iceland’s past, celebrating their contributions to the nation’s culture and independence.
You’ll find faces like Jón Sigurðsson, a leader in the Icelandic independence movement; Brynjólfur Sveinsson, a bishop and scholar who preserved important Icelandic manuscripts; painter Jóhannes Kjarval; Ragnheiður Jónsdóttir, a skilled seamstress and educator; and Jónas Hallgrímsson, a poet and naturalist who helped shape the Icelandic language.
Final Thoughts
When you’re planning your trip to Iceland, remember that the official currency is the Icelandic Króna (ISK). While credit and debit cards are widely accepted, it’s a good idea to have some cash on hand for smaller establishments or situations where cards aren’t an option.
Understanding the exchange rates will help you manage your budget effectively, and be sure to look for money-saving tips to make the most of your trip.
With a little planning, you can navigate Iceland’s currency like a pro and focus on enjoying the breathtaking landscapes and unique experiences this incredible country has to offer.