Want to know more about the currency in Iceland? They use the Icelandic Krona (ISK), and here’s more info about ATMs, money and exchange rates before your trip.
I will also answer some of the most frequently asked questions about money and currency in Iceland.
Quick facts about the Icelandic Krona (ISK)
- Name: Icelandic Krona.
- Date of introduction: 1885.
- Coins: 1, 5, 10, 50 and 100 krónur
- Subunit: None
- Banknotes: 500, 1000, 2000, 5000 and 10000 ISK
- Abbreviation: IsKr
- Currency Code: ISK
Can you pay by card in Iceland?
Yes, debit- and credit cards are widely accepted in Iceland, including VISA and Mastercard as well as American Express. Icelanders themselves usually pay the majority of their expenses by card, but it’s still a good idea to get some cash on your trip.
Should you exchange money before your trip?
Not many banks outside of Iceland will offer to change Icelandic kronur but don’t worry, there is no need to exchange money before your trip. It’s much better to bring a travel card with zero fees for atm withdrawals and currency exchange.
Exchange currency in Iceland
There are local exchange offices in all major cities, most frequently in Reykjavik. However, there is no real reason to use these because the rate given will be worse than what you get when taking out cash from local ATMs.
Money in Iceland
Iceland is a developed society where card payment is the norm, but there are still places that only accept cash payments, and it’s a good idea to have some Icelandic Krona with you while traveling around the country.
The people on the banknotes are all important Icelanders from various times of the country’s +1000-year-old history.
ATMs in Iceland
Every major city will have one or several ATMs. Most of them are located in the capital Reykjavik, so if you’re planning to venture out into the wilderness and remote towns, it might be a good up to take out some cash before you leave Reykjavik.
However, even the most remote Icelandic towns will have an ATM nearby. Always remember to be charged in the local currency without conversion. Never use a Euronet ATM, and use the ATMs connected to a local bank instead and avoid expensive currency exchange rates and atm fees.
The Icelandic ATMs don’t have any local atm fees, but your own bank is likely to charge around €5 per withdrawal + 1-3% in foreign transaction fee. Always use a travel card without fees.
List of Icelandic banks
- Arion Bank
- Islandsbanki
- Landsbankinn
More about Iceland’s currency (ISK)
Since 1855, the Icelandic Krona (kronur in plural) is used as currency in Iceland. It has the currency code ISK and is given out by Seðlabanki Íslands – SI. The Icelandic currency is available in both coins and banknotes. In 1981 a currency reform was performed where the old Icelandic krona was replaced due to high inflation.
By the time of transition and introduction of the new Icelandic Krona, 1 ISK was worth 100 of the old kronur. Previously, a subunit called aurar was also used, but they are no longer used.
Icelandic money in various denominations
- Coins: 1, 5, 10, 50 and 100 krónur
- Subunit: None
- Banknotes: 500, 1000, 2000, 5000 and 10000 ISK
Frequently asked questions about Money in Iceland
Can you use Euros in Iceland?
Euros are usually not accepted as payment in Iceland. And if a shop or tour operator accepts Euros, the rate given will not be good anyway. Always pay in the local currency.
Can you use US dollars in Iceland?
American Dollars are not accepted in Iceland, but you can exchange US dollars in Reykjavik, but it’s better to bring a travel card with zero fees for ATM withdrawals and card payments.
Should I bring cash to Iceland?
You don’t need to bring cash to Iceland because most places accept card payments, and there are plenty of ATMs around the country, especially in Reykjavik.
What currencies are accepted in Iceland?
The only legal tender is the Icelandic Krona (ISK).
Are credit cards widely accepted in Iceland?
Yes, all major debit and credit cards are widely accepted in Iceland, including VISA, Mastercard, American Express, etc.
Do you need a PIN to use a credit card in Iceland?
Most card terminals in Iceland use the chip-and-PIN system, which requires a 4-digit PIN to make a purchase with your card. Some terminals have the option to bypass this option and let you sign the receipt.
However, it’s better and safer to get a card with a chip and PIN before your trip.
Can I withdraw money in Iceland?
Yes, the Icelandic ATMs accept all major debit and credit cards.
Can I use my Costco card in Iceland?
Yes, you can use your Costco card in the Icelandic Costco stores as well.
What about tipping?
Tipping isn’t customary in Icelandic culture and society. The service fee is already included in the price, and there’s no need to add extra tipping to the bill.
However, tipping is always welcomed, and many Icelanders know about the American tipping culture, so they won’t say no to some extra cash.
Tax-Free Shopping in Iceland
The VAT in Iceland is 25.5% or 7% on special goods. Purchases of souvenirs, gifts, and clothes of more than ISK 6,000 are qualified for a VAT refund if you take them out of the country.
The VAT refund is made in Icelandic Kronur but can be converted into your local currency. You should get a special receipt in the shop if you want to enjoy Tax-Free Shopping.
More reading from Iceland
Do you have more questions about the currency in Iceland? Leave a comment below!