Money in Iceland: Cards, Cash, Costs and Currency

Iceland is one of the most cashless societies on Earth. Credit and debit cards are accepted everywhere — petrol stations, campsite kiosks at 2am, the smallest farmhouse café in the East Fjords. Cash is accepted almost nowhere that card is not, and some businesses are entirely card-only. Arriving with a pocketful of Icelandic krona is a waste — the ATMs at Keflavik Airport are perfectly adequate for the small amount of cash that might occasionally be needed.

Currency

Iceland's currency is the Icelandic krona (ISK). As of early 2026, the exchange rate is approximately ISK 175-185 per GBP and ISK 140-150 per EUR, though rates fluctuate. Pre-trip currency conversion at UK high street bureaux is generally poor value. Using your card abroad via a Mastercard or Visa (which use the Mastercard/Visa wholesale rates) typically provides a better effective rate than any currency exchange. If your bank charges foreign transaction fees, open a Wise, Starling or Revolut account before travelling — these provide fee-free card transactions at competitive exchange rates.

Costs

Iceland is consistently among the most expensive countries in Europe for travel. A mid-range dinner for two in a Reykjavik restaurant costs GBP 80-120 including drinks. A basic lunch (soup and bread) costs GBP 15-20 per person. Coffee: GBP 5-7 per cup. A 500ml bottle of water in a café: GBP 4-6. Accommodation: GBP 120-200 per night for a mid-range double in peak season. Petrol: approximately GBP 1.60 per litre. Alcohol is expensive by any European standard — Iceland's state alcohol retail monopoly (Vínbúðin) is the cheapest source, and pre-stocking from the Keflavik duty-free allowance (1 litre spirits, 6 litres beer) on arrival saves meaningfully on a two-week trip.

Tipping

Tipping in Iceland is not customary and is not expected. Service staff are paid proper wages and no social convention of tip-based income exists. Tipping at restaurants or in taxis is neither expected nor standard. If service has been genuinely exceptional, a small tip will be received warmly but is not required.

ATMs and Currency

ATMs are available at Keflavik Airport (arrivals hall), in every town on the Ring Road, and at most petrol stations. Icelandic ATMs dispense Icelandic Króna (ISK) and accept all major international cards. Typical withdrawal fees: ISK 450 to ISK 600 per transaction from Icelandic bank fees, plus your home bank's international withdrawal fee. Pre-ordering Icelandic Króna from a UK bank before departure is rarely cost-effective — the exchange rate offered at Keflavik ATMs is typically comparable to or better than pre-ordered cash rates. Credit and debit cards are accepted literally everywhere in Iceland including market stalls, small guesthouses, and farm shops. Cash is rarely necessary outside specific situations.

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