Is it possible to pay with the Euro when I rent a car in Iceland? After all Iceland is a European country so, travelers may think they can use the Euro in Iceland. Let’s find out as I go over how to pay for your car rental in Iceland and which currency is used in the land of ice and fire.

The Icelandic Krona: World’s smallest currency

Iceland is unique in so many ways, from its volcanic scenery to mighty glaciers and towering waterfalls. But it is not just Iceland's natural wonders that stand out from the rest of the world.  Iceland also has its own currency called the Icelandic Krona (ISK).

The Icelandic Krona is not only the official currency of Iceland, it is also the smallest independent currency in the world. So, although Iceland is a European country, it is not part of the European Union (EU) and therefore the Euro is not used in Iceland.  

Converting ISK to Euro

This means prices in Iceland are in ISK. For example, in shops, restaurants, gas stations and even car rentals in Iceland. While some may present prices in other large currencies, such as the Euro, dollar or pounds, it is always based on the price in Icelandic Krona.

This is where things get a little tricky. Because the Icelandic Krona (ISK) is such a small currency the exchange rate changes quite often over time.

There is no need to constantly monitor the exchange rate during your trip in Iceland. It is enough to check it at arrival, as it should stay more or less the same for at least a few days or weeks. However, if you book your trip months in advance, it will most likely have changed by the time you arrive.

Prices in Iceland

Iceland is known for being both beautiful and pricey. You will find this out when you visit as all prices in ISK are in hundreds or thousands. For example, the price of fuel is around 300 ISK per liter, meaning it will cost around 10.000 ISK to fill up the tank.

Now since this can be a bit confusing for travelers, many popular tourist sites and shops will display prices in ISK and other currency. Like the price tags you may see at the terminal in Keflavik International Airport. This will not be the case at the local supermarket or restaurants.

Payments in Iceland

Iceland is not a cash free country, but it is close to being one. Icelanders typically use card payments for everything. Although cash is accepted it is not a common practice when paying in Iceland.

As a result, there are two things worth mentioning. One is that you will not need to bring cash with you or get cash once in Iceland. You will get by just fine by using only card payments.

Tipping in Iceland

Second, there is no tipping in Iceland. At bars and restaurants in Iceland it is not custom to leave a tip. You simply use your card to pay and that’s it. Now of course you can leave a tip, but it is completely up to you, and no one will be offended if you don’t.

Using the Euro in Iceland

As card payments are the preferred choice in Iceland, travelers are technically using their own currency when paying in Iceland. You do not have to fill our account with Icelandic Krona before paying. So, when you rent a car in Iceland you can simply use your card.

If you do have some cash in euro, it's perfectly fine to ask if it will be accepted. Some local companies or tourist shops might allow it, but I wouldn’t count on it. But it never hurts to ask.

Conclusion

To sum up; no, you cannot use euros, or any other foreign money in Iceland. But we don't typically use much cash, so it should not be a big deal, just use your card and pay for your rental car in Iceland, or any other travel expense, with a card using whatever currency you have, euro or not.

Prices in Iceland are high and in Icelandic Krona (ISK). However, you might see prices at tourist shops and sites marked in Euro, and might even get to pay in it, but that’s an exception from the general rule.

Luckily you can use cards for all payments in Iceland, so there is really no need to worry about currency. Just have some idea of the current exchange rate, so you can sort of estimate how much you are spending in your own currency.

If you like to learn more about visiting Iceland, please see our Blogs. There you will find Practical Info and more useful travel tips, such as Driving in Iceland and more.

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