The use of credit and debit cards is very common in Iceland, which people rely on 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 an ice-cream.
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.
Visa and Mastercard are widely accepted in Iceland, while American Express and Discover not so much. However, some establishments do accept the latter.
| Merchant acceptance | ATM acceptance | |
|---|---|---|
| Visa |  High | High |
| Mastercard | High | High |
| American Express |  Low |  Medium |
| Discover | Medium | Low |
Using your American credit card in Iceland can burden you with added fees so make sure you find out which fees you’ll need to pay.
Several credit cards issued by American banks come with foreign transaction fees that you’ll need to pay every time you use the card outside of the US. This fee typically varies from 2% to 3%. Some banks offer cards with no foreign transaction fees. An example of such a card include the Capital One VentureOne Rewards Credit Card (Terms apply, see rates & fees) and the Chase Sapphire Reserve® credit card.
If someone gives you the choice of getting your card swiped in US dollars or Icelandic króna, opt for the latter. Paying in US dollars will subject you to dynamic currency conversion that can lead to less-than-desirable exchange rates along with currency conversion fees. When outside of the US, always choose to pay in the local currency and let your bank do the currency conversion.
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 villages. What you need to remember is not all ATMs in Iceland remain accessible round-the-clock. Most ATMs 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.
Iceland, like the rest of Europe, has moved from magnetic-stripe cards to chip enabled cards. However, you may still use your magnetic-stripe card in Iceland and you’ll need to sign a receipt to verify the transaction. In some cases, you may need to present some form of ID. Given that chip cards offer enhanced safety, you might want to consider getting one.
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 manned. Examples include gas stations, automated parking machines, some public toilets, transit ticket vending machines and food/beverage 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 clerks to accept cards with signatures just to avoid confusion.
Some gas stations don’t accept cash, so you might find yourself in a situation where you have a chip-and-signature card and cash, but no way to pay for your purchase. An easy way to avoid this problem is by buying some prepaid gas cards early into your visit. You’ll need to select a specific brand, and N1 remains the most recommended because of its extensive network.
While it is safe to use your card in Iceland, you should exercise the same level of watchfulness as you would in the US.
Keep your PIN secure. Don’t note down your PIN anywhere. When using a keypad to enter your PIN, use one hand to shield it from curious onlookers and hidden cameras.
Choose ATMs carefully. Try and stick to ATMs found in public places and banks. Avoid ones in isolated spots.
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.
Ask yourself these questions to avoid common credit card related problems in Iceland.
When in Iceland, you’ll get to use your credit card just about everywhere you go. Ask your bank if you can get a chip-and-PIN card for your travels to further simplify the trip and carry some cash for emergencies.
See more guides on using a credit card in other countries.
Using your credit card for a cash advance is not recommended. You’ll end up paying a cash advance fee, interest will start adding up from the day of the transaction and the APR for cash advances if typically higher than the APR for purchases. If you need to withdraw cash from an ATM, you’ll need a PIN. Check the corresponding table to get an indication of the costs that come with an overseas cash advance.
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