Cash, Card and ATMs in Iceland: What to Know Before a Self-Drive Road Trip

Iceland is one of the most cashless societies on the planet: according to Central Bank of Iceland data relayed by the European Payments Council, cash in circulation represents barely 2-3% of GDP, one of the lowest rates in the world, well below the eurozone average. In practice this means Visa and Mastercard are accepted absolutely everywhere: fuel stations, campsites, Reykjavik cafés, and even the most remote roadside stalls, down to the informal honesty-box stands selling eggs or wool socks on nothing but a cash box left on a table.

That last point is worth a caveat: these honesty-box stalls, once cash-only out of necessity, are increasingly fitted with a simple card reader linked to a phone. It's still wise to keep a small float of krona for these occasional cases, as well as for the paid toilets at some natural sites that haven't all switched to contactless payment.

The Icelandic krona (ISK) is almost never stocked by bureaux de change outside Iceland, and the rate there is poor anyway — better to exchange nothing before departure. The rate was hovering around 142 ISK to the euro in late August 2026 — worth checking again just before you leave, as it shifts noticeably from one season to the next. An ATM withdrawal with an international card, or a direct card payment, will almost always beat the rate at a currency exchange counter.

One simple but decisive habit at every card payment or ATM withdrawal: always choose to be billed in Icelandic krona (ISK) and decline the automatic conversion offered in euros or dollars — the well-known DCC, or dynamic currency conversion. Presented as a convenience, this option actually applies an unfavourable exchange rate set by the merchant or the ATM operator, while the rate applied by your own bank is almost always better.

This is what really sets Iceland apart from a typical European destination. Outside Reykjavik and the main towns, most fuel stations (N1, Orkan, Olís) run fully unmanned, self-service, 24/7, with no staff on site and no way to pay in cash: the bank card is the only option. These machines require chip-and-PIN payment, never signature — a detail that trips up travellers every year, especially from North America, whose cards can rely on signature and simply get declined at the pump.

Another quirk worth planning for: these machines place a pre-authorisation, a temporary hold of roughly 15,000 to 30,000 ISK (about a hundred euros), while the actual fuel amount is processed — the difference is released automatically within 2 to 5 business days. On a card with a tight limit or a lightly funded account, these repeated holds at every fill-up can eat into available balance faster than expected, especially toward the end of a road trip. Double-checking before departure that you know your PIN by heart — not just saved on your phone — avoids one of the most common and most avoidable hold-ups on the Icelandic road.

The instinct to keep a little cash "just in case", even in a country as card-driven as Iceland, isn't irrational: a 2025 study by Ameet Kumar Banerjee and Anand Jhawar, published in Loisir et Société / Society and Leisure based on 386 traveller responses, found that perceived risk — fear of a card being blocked, of fraud, or of an offline terminal far from anywhere — directly reduces trust and the intention to use digital payments while travelling, even when the local infrastructure makes them theoretically unnecessary (study available on Google Scholar: scholar.google.com/scholar?q=Banerjee+Jhawar+shy+away+cash+payments+during+travel+digital+payment+systems). The authors also note that good prior knowledge of the destination's payment system meaningfully lowers that perceived risk.

Applied to Iceland, that translates very concretely: it isn't cash that protects you from a mishap on a stretch of Route 1 far from any village, but a working second card kept separately, and the certainty that your PIN will work at the next pump.

In practice, Icelandic krona covers very little on a typical self-drive road trip. Here are rough figures for a couple on a two-to-three-week circuit.

A few habits are enough to avoid improvising on this front. Confirm you know your PIN by heart before departure: it's the linchpin of paying at the pump in Iceland, far more than how much cash you're carrying. Notify your bank of your travel dates and destination to avoid a fraud-prevention block on your first fill-up. Carry a second card from a different bank, kept separately, in case a card is blocked, lost, or swallowed far from a branch — rare at self-service machines, but not impossible on an older ATM. And always choose ISK over the automatic euro conversion, at every terminal.

Everything else — which 4x4 to pick against the F-roads, how to budget fuel over a full loop of Route 1, where you can legally sleep in a campervan — is covered in the other chapters of our "Iceland self-drive" guide, built for a road trip without nasty surprises, cash or card.