Using UK credit cards in Iceland

The use of credit and debit cards is very common in Iceland; people rely on them to pay for even the smallest of purchases. Almost all hotels, and most businesses, in the country accept cards, and you can even use yours to pay for a cab ride, a coffee or a pot of Skyr.

The most commonly accepted cards are ones with Visa and Mastercard branding, although American Express and Diners Club cards find takers as well. Acceptance of Maestro, Electron and EDC debit cards is on the rise. Hardly any establishments accept Discover cards.

Cash machines in Iceland

ATMs are easy to find and you’ll see a few as soon as you arrive at the Keflavík International Airport. You’ll also come by cash machines in most villages. What you need to remember is not all ATMs in Iceland remain accessible round-the-clock. Most cash machines accept international credit, debit and cash cards, although you might want to look for the Cirrus or PLUS logo. ATMs in the country give you a reliable way to get cash, providing competitive exchange rates.

And the best news? You can use most ATMs in cities and large towns in English!

Cash in Iceland

You’ll need to pay for most small purchases in cash. Keep a few thousand króna in cash to pay newspaper vendors, cafes, restaurants, bars and small souvenir shops.

Chip and PIN

Iceland has moved from magnetic-stripe to chip cards, and all banks in Iceland now issue the latter. You’ll still be able to use your magnetic-stripe card in Iceland – you just need to sign a receipt to verify the transaction.

You can use your chip-and-signature card across most places in Iceland. If you don’t have a PIN, you’ll simply need to sign a receipt and probably show an identification document such as your passport. You will have problems using your card at machines that are not staffed. Examples include petrol stations, automated parking machines, some public toilets, transport ticket vending machines and food/drink dispensing machines.

Some supermarkets don’t encourage the use of chip-and-signature cards because processing them takes more time. Some businesses don’t allow their staff to accept cards with signatures just to avoid confusion.

Is it safe to use my card in Iceland?

By exercising some caution when using your credit card in Iceland, you’ll have a relatively trouble-free experience.

• Keep your PIN safe. Use one hand to enter the PIN and the other to shield it from prying eyes and hidden cameras.
• Select ATMs with care. Try and stick to ATMs in banks and avoid using ones in the street.
• Watch out for “skimmers”. When installed in an ATM, a card skimmer works by stealing information from credit and debit cards. If you feel the card slot is not as smooth as it should be or if there’s a problem with the keypad, cancel your transaction and look for another ATM.

Keeping your credit card (physically) safe

Remain alert to street crime, especially where two or more people work in distracting victims before decamping with their valuables.The crime rate in Iceland is low and using common sense can help ensure your card’s safety. Don’t leave your bag on the floor at a bar or a nightclub. Don’t leave your wallet or bag in a parked car. Downtown Reykjavik might become unruly late at night as people leave clubs and bars, with instances of petty theft not uncommon.

Potential credit card fees

Credit card fees can leave a noticeable dent in your pocket when you’re travelling overseas, so know what you’re up against well in advance and choose a card with no or low fees.

Foreign transaction fees

British credit card issuers typically charge a fee equivalent to 1% to 3% of your transaction, so carefully review your card’s fine print to avoid statement surprises. Some cards designed for travel come with no foreign transaction fees, so this could be a good time to switch.

Learn more about cards designed for overseas spending

Currency conversion fees

If a retailer offers to bill your credit card in sterling, dynamic currency conversion comes into play. While this might sound like a good deal, you’ll actually end up getting a worse exchange rate, and you might also end up paying currency conversion fees. Whenever you’re presented with an option, choose to pay in local currency.

Cash advance fees

Using your credit card to withdraw money from an ATM may not make sense unless it’s a bona fide emergency. Each time you withdraw funds from an ATM, you’re likely to pay a cash advance fee. Your APR for cash advances is typically higher than your purchase APR, and you’ll typically get no grace period on interest — instead, you start paying interest immediately. Again, some cards designed for overseas spending will waive the cash advance fee.

The table below serves as an example of how much extra you may pay to use your credit card in Iceland.

Additionally you can get an idea of costs by using these online currency conversion tools from Mastercard and Visa.

How to prepare before travelling to Iceland

1. Go with Visa or Mastercard. Carry at least two cards on your trip to Iceland, preferably connected with Visa or Mastercard. If you just take an American Express card, you won’t get to use it in many places.
2. Think no foreign transaction fees. When there are cards that come with no foreign transaction fees, using ones that charge 2% or 3% of each overseas transaction does not make sense. Some of these cards don’t charge an annual fee, either.
3. Keep your bank posted. Banks, in their efforts to thwart fraudulent transactions, block credit cards if they detect suspicious activity such as unexpected overseas transactions. To make sure this does not happen to your card, let your bank know about your travel plans before you leave the UK.
4. Keep the emergency number handy. Know which numbers you’ll need to call if you end up losing your card or if you need an emergency replacement.
5. Know where you’ll get cash from. Consider using your debit card to withdraw cash from ATMs. If you need to exchange money, stick to banks or official money-exchange offices because possessing counterfeit money in Iceland is a serious crime. Try to avoid exchanging money at airports and popular tourist destinations because of typically poor exchange rates.

Next steps

Ask yourself these simple questions before you leave so your spending in Iceland does not hit any roadblocks.

• Which cards will I take? Visa and Mastercard are the favourites. If you’re planning a trip, check out cards which give you complimentary airport lounge access. If you’re planning well in advance, consider earning air miles for your trip with a frequent flyer credit card.
• Have I let my bank know? If you don’t inform your bank about your travel plans, you may end up with a temporarily suspended card.
• What fees do I need to pay? If your existing cards come with foreign transaction fees, look for one that does not. Paying in Sterling outside of the UK might come with currency conversion fees.
• How will I get cash? Using your debit card at an ATM is the simplest way to access your own money. You can carry cash and traveler’s cheques with you. Exchanging sterling to króna is easy and you’ll get several options.

When you’re in Iceland, you don’t have to worry about where and when you can use your credit card. Just keep some cash handy to pay for small purchases.

Cards with fee-free currency conversion in Iceland

1 - 8 of 23

Updated daily

Name	Product UKCCF	Finder Score	Finder score	Purchases	Annual/monthly fees	Initial credit limits	Representative APR	Incentive	Link
Santander All in One Credit Card		4.4 ★★★★★	★★★★★ Expert analysis	0% for 15 months reverting to 23.9%	£3 per month	Min. limit £500, max. limit not specified.	29.8% APR (variable)	0.5% after £1 of monthly spend. Maximum of £10 cashback paid per month. Cashback paid Monthly into Card Account. Maximum spend for cashback purposes is limited to credit limit. Representative example: When you spend £1,200 at a purchase rate of 23.9% (variable) p.a. with a fee of £3 per month, your representative rate is 29.8% APR (variable).	Check eligibility Read review Compare	loading Fetching your data...
Yonder Credit Card Finder Award		4.5 ★★★★★	★★★★★ Expert analysis	29.94%	1 month for £0, £15 per month thereafter	Min. limit not specified, max. limit not specified.	66.7% APR (variable)	First month free for new members, £15 p/m thereafter. Plus, 10,000 bonus points. Earn 5 points per £1 spent and up to 25 points per £1 at selected partners. Membership includes worldwide travel insurance, no FX fees and use your points towards any flight. Representative example: When you spend £1,200 at a purchase rate of 29.94% (variable) p.a. with a fee of £15 per month, your representative rate is 66.7% APR (variable).	Check eligibility Read review Compare	loading Fetching your data...
118 118 Money Guaranteed Rate Card		3.8 ★★★★★	★★★★★ Expert analysis	49%	£0	Min. limit £500, max. limit not specified.	49% APR (variable)	Representative example: When you spend £1,200 at a purchase rate of 49% (variable) p.a., your representative rate is 49% APR (variable).	Check eligibility Read review Compare	loading Fetching your data...
Yonder 'No Fee' Credit Card Finder Award		4.0 ★★★★★	★★★★★ Expert analysis	32.9%	£0	Min. limit not specified, max. limit not specified.	32.9% APR (variable)	Representative example: When you spend £1,200 at a purchase rate of 32.9% (variable) p.a., your representative rate is 32.9% APR (variable).	Check eligibility Read review Compare	loading Fetching your data...
Santander Edge Credit Card Mastercard		4.5 ★★★★★	★★★★★ Expert analysis	23.9%	£3 per month	Min. limit £500, max. limit not specified.	29.8% APR (variable)	2% after £1 of monthly spend in first year, then 1%. Maximum of £15 cashback paid per month. Representative example: When you spend £1,200 at a purchase rate of 23.9% (variable) p.a. with a fee of £3 per month, your representative rate is 29.8% APR (variable).	Read review Compare	loading Fetching your data...
The Royal Bank Credit Card		4.6 ★★★★★	★★★★★ Expert analysis	12.9%	£0	Min. limit £250, max. limit not specified.	12.9% APR (variable)	Representative example: When you spend £1,200 at a purchase rate of 12.9% (variable) p.a., your representative rate is 12.9% APR (variable).	Read review Compare	loading Fetching your data...
NatWest Credit Card		4.7 ★★★★★	★★★★★ Expert analysis	12.9%	£0	Min. limit £250, max. limit not specified.	12.9% APR (variable)	Representative example: When you spend £1,200 at a purchase rate of 12.9% (variable) p.a., your representative rate is 12.9% APR (variable).	Read review Compare	loading Fetching your data...
Royal Bank of Scotland Reward Black Credit Card		4.0 ★★★★★	★★★★★ Expert analysis	21.9%	£84 per annum. Reward Black Current Account holders: £0 per annum	Min. limit £5,000, max. limit not specified.	40.7% APR (variable)	Earn 1% back at supermarkets and 0.5% back everywhere else, including supermarket petrol stations. At selected retailers, you could earn 1-15% back. Representative example: When you spend £1,200 at a purchase rate of 21.9% (variable) p.a. with a fee of £84 per annum. Reward Black Current Account holders: £0 per annum, your representative rate is 40.7% APR (variable).	Read review Compare	loading Fetching your data...

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Frequently asked questions

• What is the sterling to króna exchange rate?

• How do I send money to Iceland?

  We use banks to take care of all our other financial needs, so surely we should use them when sending an international money transfer, right? Not necessarily. While major UK banks offer money transfer services, they typically present less competitive exchange rates coupled with high transfer fees.

• What is the most commonly used credit card network in Iceland?

  Visa and Mastercard are almost on a par. American Express follows at a distant third.

• Are there any currency restrictions for entry into Iceland?

  There are no currency restrictions, although you’ll need to declare if you’re bringing in more than €10,000 or its equivalent in another currency.

Written by

Emily Herring

Publisher

Emily Herring is a Publisher at Finder specialising in credit-based products including credit cards and business and personal loans. Emily has recently joined the Investments team. She has a Masters in Creative Writing & Publishing and a Bachelor of Arts in Communication & Media. See full bio

Emily's expertise

Emily has written 147 Finder guides across topics including:

• Loans & credit cards
• Building credit