What’s the Best Currency to Take to Iceland? All About Currency in Iceland for Travellers in 2023

Are you travelling to Iceland soon and wondering which currency you should take there? Curious whether you should take British pounds or US dollars along with you or whether it's best to buy the local currency at the airport? Then this short guide is for you!

Iceland uses the Icelandic króna as its currency, meaning that, except in tourist establishments, airports, or hotels, you normally won't be able to use your home currency to pay your way, even if it's a popular tourist currency like the British pound or the euro.

As we'll see, to pay while you're visiting Iceland, you'll either need to buy króna banknotes before or during your trip, use your ordinary credit or debit card, or (cheapest of all) use a savvy multi-currency debit card like Revolut's or Wise's travel debit cards.

In this short guide, we'll discuss what's the best currency to take to Iceland, how you should pay when you're there, and what your cheapest options are to avoid paying hefty exchange rate charges.

Overview of Currency in Iceland

James Cridland, CC BY 2.0

As we saw earlier, the currency in Iceland is the Icelandic króna.

As the official legal tender in Iceland, it's the sole currency recognized by the Icelandic government, and you can use it to settle all financial obligations in the country, from paying for your hotel stay to the entrance fee at the Blue Lagoon, to a bite to eat in downtown Reykjavík.

Note that if you buy a large sum of króna banknotes and bring them home unused with you after your holiday, you'll probably get a bad deal on the exchange rate by swapping krónur back into your home currency since most banks and exchange offices mark up the króna more than usual, partially to account for its inflation. This means that if you buy króna banknotes, you should try to budget carefully to avoid bringing any home.

You can learn more about the Icelandic króna currency here.

Best Currency to Take to Iceland

Ludovic Charlet

Because it's the local currency and because you won't have any trouble buying goods with it, the best country to have on hand and spend while visiting Iceland is, unsurprisingly, the Icelandic króna.

However, if you arrive in Iceland with another currency on hand, it doesn't necessarily mean you won't be allowed to pay in Iceland. Especially if you're carrying a popular tourist currency like the pound sterling, the euro, or the US dollar, you'll find it easy to exchange them for krónur at banks or currency exchange offices across Iceland — even if those currencies aren't official or used commercially in Iceland.

You can check out the prevalence of a few of the most popular tourist currencies in Iceland below:

Although the Icelandic króna is the best currency to use and other tourist currencies can be easily exchanged, exchanging currencies in the form of cash almost invariably leads to poor exchange rates for tourists (we've seen as high as 20% commissions, although the average is between 5% and 15% of the amount exchanged). Over and above that, Iceland is a largely cashless society, meaning cash isn't always accepted while card payments are universal.

For these reasons, it's a much better idea to use your credit or debit card to pay at local points of sale wherever possible or (if cash is urgently needed — which can happen in Iceland) to withdraw some money from a local ATM. This will let your card provider handle the conversion, which is usually, although not always, a better deal than bringing foreign currency into Iceland and exchanging it there. However, as we'll see below, a conversion-friendly debit card is the best choice of all!

ChangeGroup

ChangeGroup is a reliable option if you need physical Icelandic króna in cash on hand before your flight abroad to Iceland. Although it's generally more affordable than exchange offices in Reykjavik for buying króna banknotes, it's still quite pricey compared to using your card, hovering around 15%. This is why we tend to recommend Revolut and Wise for spending in Iceland.

• FX Margin to Króna: 10% - 16%
• Home Delivery: For a fee
• Cash Pick Up: Free
• Guaranteed Buyback: For a fee
• Availability: UK, USA, Australia, Germany, France, Austria, Spain, Denmark, Sweden, Finland

How to Pay in Iceland

Einar H. Reynis

When it comes to paying your way in Iceland, you'll have the following three options broadly speaking:

Method 1: Cash

Iceland is an almost completely cashless society, with fewer than 10% of the country's retail transactions taking place in cash. As a result, if you don't have any króna banknotes during your trip, if anything, that'll be an advantage, seeing how some establishments don't even accept cash at all. Still, there might be occasions where having some cash on hand for tipping or emergencies can be useful (or if you just want to just collect króna banknotes as a souvenir before they get phased out altogether!).

Note that in Iceland, currency exchange offices normally go by the name geldskiptastöð , so if you want to exchange your home currency for Icelandic króna, be on the lookout for signage with this name.

• Cash Prevalence in Iceland: Not prevalent
• Cost to Exchange: 5% - 20% on average

Method 2: Credit Card

Of course, because Iceland is a largely cashless society, credit and debit cards issued by major global providers like VISA and Mastercard are commonly accepted%CASH_LEAD_IN_CLOSE%. If your card is issued by American Express, Diner's Club, or another card company, there's a good chance they'll also be accepted in Iceland, but we recommend checking with your bank or card provider directly to make sure that Icelandic króna currency conversion is indeed supported, and that card machines and ATMs in Iceland commonly support cards of this type.

• Card Prevalence in Iceland: Very prevalent
• Cost to Exchange: 2% - 5% on average

Method 3: Travel Debit Card

Just like credit cards, prepaid debit cards (which are also normally issued by VISA or Mastercard) provide an excellent way to pay while visiting Iceland, the main difference being that you normally pay lower fees and exchange rates. Depending on where you live, you'll probably have options from your bank or a third-party provider to use a commission-free debit card or a multi-currency card which can help you dodge high Icelandic króna conversion costs, including DCCs.

According to our analysis of dozens of providers, the top two options for travelling to Iceland, in general, are the following:

Revolut

Revolut is an excellent option for paying in Iceland. Its all-in-one mobile finance app and debit card offer competitive exchange rates to the Icelandic króna and low fees. Moreover, you can easily manage everything through your money through Revolut's user-friendly app.

• Monthly fee: $0
• Card type: Mastercard debit
• Card payment cost in Icelandic króna: 0.5% - 1.5%
• Cash withdrawal fee: 0% - 2%
• Icelandic króna balance: Yes
• Icelandic króna bank details: No

Wise Account

The Wise Account is another great option for paying in Icelandic króna. It gives you the lowest possible currency exchange rates with complete transparency and no hidden fees. It also allows you to hold and manage over 50 currencies in one account and provides fast and secure cross-border money transfers at a fraction of the cost of traditional banks.

• Monthly fee: $0
• Card type: VISA debit
• Card payment cost in Icelandic króna: 0.5% - 1.5%
• Cash withdrawal fee: 0% - 2%
• Icelandic króna balance: No
• Icelandic króna bank details: No

Wise and Revolut are excellent options that are available in many countries around the world. However, depending on where you live, you might have access to better deals still. We go over a few of them below:

United Kingdom

1. Revolut: Best spending and budgeting app.
2. Wise: Best for multiple foreign currency balances.

United States

1. Chime®: Best all around; no fees for non-USD transactions.
2. Revolut: Best all-around spending app.
3. Wise: Best for foreign currency spending and holidays.

Canada

1. KOHO: Best all around; just 1.5% on foreign transactions
2. Wise: Best for foreign currency spending and holidays.

European Union

1. Revolut: Excellent for spending abroad.
2. N26: Best full bank account with low fees (even abroad)
3. bunq: Best credit card (also a fully-licensed bank).