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Using a credit card in Iceland

The use of credit and debit cards is very common in Iceland, with locals and tourists alike using them to pay for even the smallest of purchases.

Both credit and debit cards are widely accepted in Iceland, with most hotels and businesses accepting Visa and Mastercard branded cards. Some merchants may accept American Express, but it’s best to travel with at least one Visa or Mastercard in addition to your Amex. Credit and debit cards are so commonly used in Iceland that you can even pay for the smallest purchases with plastic such as a taxi ride, a coffee or even an ice-cream.

Compare credit cards for use in Iceland

If you’re thinking of applying for a new credit card before you head to Iceland, look into a credit card that charges no foreign transaction fees. Although the fees are relatively low, they can add up quickly if you use your credit card often.
Name Product Welcome Offer Rewards Purchase Interest Rate Annual Fee Min. Credit Score Description
Brim World Mastercard
Up to $300 worth of bonuses
1.5 points for every $1 spent
19.99%
$99
Min. recommended credit score: 700
Earn up to $300 worth of bonus points when you shop with Brim retailers for the first time through the Brim mobile app. 
HSBC World Elite® Mastercard®
70,000 Points
Up to 6 points per $1 spent
19.9%
$0 annual fee for the first year ($149 thereafter)
Min. recommended credit score: 650
Get a Welcome Bonus of 20,000 Points ($100 travel rewards). Plus, earn an additional 50,000 Points and get a 1st year annual fee waiver. Apply by September 27, 2021.
BMO U.S. Dollar Mastercard
N/A
N/A
19.99%
$35 USD
Min. recommended credit score: 725
When your purchases total US$1,000 or more in a year, the next year's annual fee (US$35) is rebated to your card.
Brim World Elite Mastercard
Brim World Elite Mastercard
Up to $500 worth of bonuses
2 points per $1 spent
19.99%
$0 annual fee for the first year ($199 thereafter)
Min. recommended credit score: 700
Collect up to $500 worth of bonus points when you shop with Brim retailers for the first time using your Brim World Elite Mastercard.
Scotiabank Gold American Express Card
40,000 points
Up to 5 points per $1 spent
19.99%
$120
Min. recommended credit score: 700
Earn up to 40,000 bonus Scotia Rewards points in your first year (that’s up to $400 towards travel) Apply by August 31, 2021.
Scotiabank Passport Visa Infinite Card
40,000 points
Up to 2 points per $1 spent
19.99%
$139
Min. recommended credit score: 750
Earn up to 40,000 bonus Scotia Rewards points in your first year (that’s up to $400 towards travel). Apply by July 1, 2021.
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Canadian Visa and Mastercard credit cards are widely accepted abroad. Check with your bank before travelling to Iceland to confirm whether or not you’ll be able to use your credit card during your trip.
Name Product Welcome Offer Rewards Purchase Interest Rate Annual Fee Min. Credit Score Description
HSBC +Rewards™ Mastercard®
20,000 Points
2x points per $1 spent
11.9%
$0 annual fee for the first year ($25 thereafter)
Min. recommended credit score: 630
Get 20,000 Points (up to $100 in value), plus get a 1st year annual fee waiver. Apply by September 27, 2021.
BMO CashBack Mastercard
5% cash back
Up to 3% cash back
19.99%
$0
Min. recommended credit score: 660
Get 5% cash back on all eligible purchases in the first three months of card membership (up to max. spend of $2,000). Plus, get a rate of 1.99% on balance transfers with a 1% balance transfer fee for nine months.
Tangerine World Mastercard
1.95% rate on balance transfers for 6 months
Up to 2% cash back
19.95%
$0
Min. recommended credit score: 680
Get a 1.95% interest rate on balance transfers for the first six months (valid within the first 30 days of account opening).
BMO Preferred Rate Mastercard
3.99% rate on balance transfers for 9 months
N/A
12.99%
$20
Min. recommended credit score: 660
Get a rate of 3.99% on balance transfers for 9 months with a 1% transfer fee. Plus, get the $20 annual fee waived in the first year.
Brim Mastercard
Up to $200 worth of bonuses
1 point per $1 spent
19.99%
$0
Min. recommended credit score: 700
Earn up to $200 worth of bonus points when you shop with Brim retailers for the first time through the Brim mobile app.
Tangerine Money-Back Credit Card
1.95% rate on balance transfers for 6 months
Up to 2% cash back
19.95%
$0
Min. recommended credit score: 680
Get a 1.95% interest rate on balance transfers for the first six months (valid within the first 30 days of account opening).
Refresh Financial Secured Card
N/A
N/A
17.99%
$12.95
Min. recommended credit score: Any score
Take advantage of a low annual fee, with no credit check and guaranteed approval once you secure your card with some funds.
BMO Rewards Mastercard
10,000 points
Up to 2 points per $1 spent
19.99%
$0
Min. recommended credit score: 725
Get a bonus of 10,000 BMO Rewards points when you spend $1,000 in the first 3 months. Apply by October 31, 2021 . Plus, get a rate of 1.99% on balance transfers for 9 months. A 1% fee applies to transferred balances.
BMO World Elite Mastercard
30,000 points
Up to 3 points per $1 spent
20.99%
$0 annual fee for the first year ($150 thereafter)
Min. recommended credit score: 760
Get up to 30,000 points and the $150 annual fee waived in the first year. Apply by October 31, 2021
Scotiabank Value Visa Card
0.99% rate on balance transfers for 6 months
N/A
12.99%
$29
Min. recommended credit score: 660
Get a 0.99% introductory interest rate on balance transfers with a 0% transfer fee for the first 6 months. Apply by July 1, 2021.
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Potential credit card fees in Iceland

  • Foreign transaction fees. Most credit cards issued by Canadian banks come with foreign transaction fees. Sitting around 2.5% of the total transaction cost, you’ll need to pay this fee every time you use your credit card outside of Canada. Fortunately, there are a few credit cards that offer no foreign transaction fees in Canada.
  • Currency conversion fees. If someone gives you the choice of paying in Canadian dollars or Icelandic króna with your credit card, always choose the local currency. Paying in Canadian dollars with your card will subject you to a dynamic currency conversion that can lead to poor exchange rates and currency conversion fees. When outside of Canada, always choose to pay in the local currency and let your bank do the currency conversion.
  • Cash advance fees. If you use your credit card to withdraw money from an ATM, you’ll face a cash advance fee. In addition, you’ll also be charged interest from the day you withdraw the funds. There is usually no grace period with a cash advance transaction and the cash advance interest rate is often higher than the purchase interest rate. Instead, use your debit card to withdraw funds from an ATM.
  • ATM fees. Even using your debit card to withdraw funds from an ATM will likely have you facing an ATM fee. To avoid this fee, you can use a debit card issued by a bank that has an international ATM alliance, such as the Global ATM Alliance offered by Scotiabank.

ATMs 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 ATMs in most towns and villages. However, ATMs in Iceland don’t always remain accessible round-the-clock, so it’s best to withdraw money during business hours just in case. Most ATMs accept international credit, debit and prepaid cards, although you might want to look for the Cirrus or PLUS logo.

Should I use my credit card to get cash?

As mentioned above, using your credit card to get cash from an ATM is not recommended. You’ll end up paying a cash advance fee as well as interest, which will start adding up from the day of the transaction. The APR for cash advances is typically higher than the APR for purchases. If you need to withdraw cash from an ATM, it’s best to use your debit card.

Paying for gas

Some gas stations don’t accept cash – so it’s best to travel Iceland with at least two different credit cards. If you want to ensure you don’t run into any problems paying for gas, you can buy some prepaid gas cards in Iceland. However if you choose to buy prepaid cards, you’ll need to select a specific brand of gas station. N1 is the most recommended gas station brand due to its extensive coverage throughout Iceland.

Is it safe to use my credit card in Iceland?

While it is safe to use your card in Iceland, you should exercise the same level of caution as you would in Canada.

  • Keep your PIN secure. Don’t write down your PIN anywhere. When using a keypad to enter your PIN, use your other hand to shield the screen from curious onlookers and hidden cameras.
  • Choose ATMs carefully. Try and stick to ATMs found in public places and banks. Avoid ATMs in isolated areas.
  • Keep your card physically safe. 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 and avoid leaving 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 occasionally occurring.

How to prepare before travelling to Iceland

  1. Carry suitable cards. Visa and Mastercard are the most widely accepted credit card brands, with American Express occasionally accepted in Iceland.
  2. Avoid foreign transaction fees. If you don’t have a card with no foreign transaction fees, think about getting one before you go. Foreign transaction fees usually cost around 2.5% and they can add up quickly if you use your card often.
  3. Tell your bank. In an effort to minimize fraudulent transactions, banks temporarily block cards if they detect suspicious activity. If you don’t let your bank know that you plan to travel to Iceland, you might end up with a suspended credit card.
  4. Keep emergency numbers handy. If your credit card is lost or stolen, you’ll need to call to get a replacement card sent to Iceland. Make sure any phone numbers you need remain easily accessible at all times.
  5. Know how you’ll get cash. An affordable way to access cash is to use your debit card at an ATM. Exchanging Canadian dollars for króna is also possible at banks and currency exchange offices. Avoid currency exchanges at hotels and airports due to high transaction fees and poor exchange rates.

Next steps

Ask yourself these questions in order to avoid common credit card related problems in Iceland.

  • Which cards will I use? Visa and Mastercard are the most widely accepted brand of credit cards, but you may find some businesses that accept American Express. Consider taking at least two credit cards with you on your travels.
  • Does my bank know? If your bank is not aware of your upcoming trip, you may have to deal with a temporarily suspended card. Always notify your bank or credit card provider of your overseas travels.
  • What fees will I face? Read your credit card terms and conditions or call and ask your credit card provider if you’ll face any foreign transaction fees. Remember, you can easily avoid currency conversion fees by paying in the local currency.
  • How will I get cash? Your options include using your Canadian debit card at a local ATM, exchanging money or carrying travellers’ cheques. Avoid using a credit card to withdraw money from an ATM unless its an emergency.

Using a credit card in …

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