How to Pay in Iceland: Credit Card & Debit Card

The island is pretty much cashless, so visitors coming to the island with wads of cash might raise a few eyebrows. Here in Iceland, the credit card reigns supreme, even though you can also use your debit card. 

Do you have an upcoming trip to the island? Or you’ve just always been curious as to how to pay for things in Iceland, this article will answer all your questions. 

Credit Cards

Credit Cards are probably the most common and easiest way for visitors to pay here on the island. But before you start bringing your entire wallet from home, get the lowdown on which credit cards are accepted and how to use them: 

Which Credit Cards are Accepted in Iceland?

As in most countries, Visa and MasterCard are widely accepted, but we do accept other credit cards here on the island, such as:

• Diners Club
• JCB 

Using Credit Cards in Iceland

One of the things that often comes as a surprise to visitors is that we do not have a “swipe and sign” system here in Iceland. Whenever we use credit cards, a 4-digit pin is required. Generally, this means that you need to have a chip card. If you do not get a chip card that requires a pin before traveling to the island, you may be in for a nasty surprise upon arrival. Coming to Iceland with a credit card with no pin is a no-go. 

Potential Credit Card Fees to be Aware of

When swiping your credit card here in Iceland, you might end up being charged much more than what’s on that price tag. This is because of the following: 

Foreign Transaction Fees

These fees can really stack up. Foreign transaction fees mean that you will be charged a certain percentage every time you use the card outside of your country. Usually, this is between 2%-3%. Some banks actually have cards with no foreign transaction fees, so this is well worth looking into. 

Currency Conversion Fees

If at any point, you are given the option of swiping in your home currency vs. the Icelandic krona, always choose the krona. That is because any payment in your home currency will subject you to dynamic currency conversion fees. These may look a lot different from the actual exchange rates (and not in a good way). 

ATM Fees

Withdrawing cash from a credit card is not considered a good idea – whether you’re in Iceland or your home country. Not only are there general transaction fees attached to such a withdrawal, but all sorts of lending fees and conditions will apply. 

Is it Safe to Use a Credit Card in Iceland?

Well, Iceland has just claimed the title of ‘Safest Country in the World’ for the 15th year in a row. So, if you’re concerned about criminal activity, you probably won’t find any during your visit to the island. But as a precaution, the same golden rules apply as back home:

• Keep your pin safe and a secret.
• Use ATMs at banks and in public places. 

Using American Express in Iceland

Amex in Iceland is not something that’s widely accepted. You might strike it lucky at some of the high-end hotels and restaurants, but in most instances, you’ll need to pay with another type of card. So, keep this in mind to avoid embarrassing situations. 

But American Express is not just problematic in Iceland. In fact, when traveling anywhere in the world, American Express is not allowed at many stores and institutions. This is because the interchange fee that business owners are responsible for is simply too high. They simply can’t take the financial punch (especially the smaller businesses). 

Debit Cards

Debit cards can also be used when visiting the island, although it’s not as common as credit cards. But once again, before rocking up with whatever is in your wallet, take note of the following: 

Which Debit Cards are Accepted in Iceland?

The debit cards that are the most widely accepted in Iceland are Visa, MasterCard, Maestro and Electron. 

Using a Debit Card in Iceland

Although you can swipe selective debit cards for normal purchases here on the island, debit cards are mostly used to get cash. As we already mentioned, Iceland is a pretty cashless country, but there are instances, for example when tipping a guide, that it’s needed. This is where it’s important to know the ins and outs of our ATMs. 

Even though it’s pretty easy to get cash from our ATMs with an international card, our ATMs are actually not all accessible 24/7. So, you will need to take that into account. Finding ATMs, on the other hand, is quite easy, with the very first being at your point of arrival – Keflavik Airport. 

Tips for Using a Credit Card and Debit Card in Iceland

If it’s your first visit to the island, the following tips will come in handy:

• Always keep in mind that the exchange rate your bank uses might differ from the exchange rate in real time. So, you’ll need to stay on top of both to make the most of your Iceland budget. 
• It might be worth looking into getting a new credit card or switching before you travel to Iceland. Not just because your card may not work here on the island (not the right type, not chipped, etc.), but because fees and charges differ. By comparing cards and opting for the one that charges the least and gives you the most perks, you’ll benefit in the long run.
• Don’t get a heart attack when swiping for gas at self-service gas stations. There is a strange standard practice that might leave you very confused and concerned. When you use one of the Icelandic self-service fuel pumps, you will find that you are often overcharged (this can range anything between $140 to $210). 

And yes, this may be a much higher amount than the actual gas you got. This is a standard arrangement and a correction will be made. However, since this correction can take a couple of days, it can really rock the budget boat if you’re not careful.

• Buying passes and tickets for public transport is easy with a card. Simply go onto the Stræto website or app, or use the Klapp app for bus tickets within the Reykjavik area, and make your purchase.
• You can pay the local taxis with a pin credit card too, and it’s not custom practice to tip the drivers here.
• Paying tolls may also not be what you’re used to back home. You can’t pass through and simply hear the chip on the windscreen beep as it takes your money. And you can’t swipe or pay cash at a cashier sitting in a toll booth. No, you need to pay Iceland tolls online with your card, preferably before you pass through the toll.
• The National Parks in Iceland are free, but parking at our National Parks is not. And even though it’s not exorbitant fees, you’ll need to remember to pay if you don’t want to end up with a higher rental car bill that includes all sorts of handling fees. Parking can be paid for with your card in a similar way to the tolls. Pay for your parking here: Thingvellir National Park, Skaftafell National Park.

Paying in Iceland Using Credit Card & Debit Card

Now that you know what the best credit card to use in Iceland is (and which is not), what you can expect from fees, and have a few general tips to help you pay your way, you’re ready for your Iceland trip. So, let that first swipe be to rent a campervan in Iceland so your island road trip adventure can begin!