Money & costs
As service and VAT are always included in prices, tipping isn’t required in Iceland.
The Icelandic unit of currency is the króna (Ikr). Coins come in denominations of one, five, 10, 50 and 100 krónur. Notes come in 500-, 1000-, 2000- and 5000-króna denominations. In July 2009 the Icelandic parliament applied for EU membership and negotiations are currently underway. Iceland is expected to join the EU by 2014, at which time the currency will probably change over to the euro. For exchange rates, see www.xe.com.
Almost every town in Iceland has a bank with an ATM, where you can withdraw cash using MasterCard, Visa, Maestro or Cirrus cards. Íslandsbanki ATMs additionally allow withdrawals using a Diners Club card. You’ll also find ATMs at larger petrol stations and in shopping centres.
Icelanders use credit and debit cards for nearly all purchases, and major cards such as Visa, MasterCard, Maestro and Cirrus – and to a lesser extent Amex, Diners and JCB – are accepted in most shops, restaurants and hotels. You can also pay for the Flybus from the international airport to Reykjavík using plastic – handy if you’ve just arrived in the country. If you intend to stay in rural farmhouse accommodation or visit isolated villages, however, it’s a good idea to carry enough cash to tide you over.
The Icelandic love of plastic makes changing foreign currency almost unnecessary. Nevertheless, if you prefer more traditional methods of carrying cash then foreign-denomination travellers cheques and banknotes can be exchanged for Icelandic currency at all major banks. Most banks charge a small commission fee for the transaction, but Landsbanki Íslands offers the service free of charge. Out of normal banking hours, you will have to rely on the poor rates and high charges of commercial exchange offices, or hope that your hotel or guest house can help you out.