Money & Prices
Currency – The Icelandic Króna
The national currency in Iceland is the Icelandic Krona (ISK).
It was first released in 1885 as Iceland (and thus its currency) was still part of the Scandinavian Monetary Union. The Icelandic Crown was thus a sub part of the Danish Crown. When Iceland became independent from Denmark in 1918 and the monetary union in Scandinavia dissolved also the Icelandic Crown separated for good from the Danish. Since 1961 the Icelandic Central Bank (Landsbanki) is in charge for issuing the money.
The money as it currently exists, that's to say the second version, was established in 1981. In September 2013, after 30 years, a new 10.000 ISK bill was released.
Technically one crown splits into 100 aurar. This is never used in practice, though. In 2002 it was decided that all prices have to be in round crown amounts.
Existing coins are: 1 kr, 5kr, 10 kr, 50 kr and 100 kr.
Bills: 500 kr, 1000 kr, 2000 kr and 5.000 kr. The 2.000 kr bill is very rare, though.
At the current exchange rate (October 2013) 1.000 ISK equals about 6 Euro.
For the accurate rate see for example:
http://www.arionbanki.is/English
http://www.oanda.com/
Prices
Iceland's fame of being one of the most expensive countries in Europe has crumbled since the banking crises in 2008 – good for the tourists (and not as bad for the Icelanders either considering the higher income through tourism and exportation). Still, Iceland is not the cheapest country in Europe. Especially food prices appear high to many travellers. You have to consider, though, almost everything has to be imported. Prices don't exceed the ones in other Scandinavian countries, though. High prices for beer, wine & co. are due to the high taxation of alcohol (also similar to other Scandinavian countries). You can get around that by buying alcohol in the duty free shop on the airport upon arrival.
A list of prices of the most common products can be found at:
http://www.numbeo.com/cost-of-living/country_result.jsp?country=Iceland
A sample of average prices:
| |
ISK |
approx. EUR |
| Meal, inexpensive in restaurant |
1,585.00 kr |
9.50 € |
| Meal for 2, mid-range restaurant, three-course |
9,884.00 kr |
60.00 € |
| Combo meal at McDonalds or similar |
1,230.34 kr |
7.40 € |
| Local beer in a bar/restaurant (0.5 liter draught) |
826.45 kr |
5.00 € |
| Imported beer in a bar/restaurant (0.33 liter bottle) |
750.00 kr |
4.50 € |
| Cappuccino (regular) |
428.67 kr |
2.60 € |
| Coke/Pepsi (0.33 liter bottle) |
244.20 kr |
1.47 € |
| Water (0.33 liter bottle) |
220.00 kr |
1.30 € |
| Pack of cigarettes (Marlboro) |
1,100.00 kr |
6.60 € |
Cash or credit card?
Iceland – the credit card heaven
Iceland is a credit card heaven. You can pay with card pretty much everywhere even in the tiniest shop in the middle of nowhere. At some places you even can't pay otherwise than with card like at gas stations after daytime opening hours.
Probably the only place you need cash for in Iceland are the public city buses (well, and the hoover at the gas stations, but maybe you won't need that).
Already the Flybus connecting Keflavik airport with Reykjavik's city centre can be paid with card or even in Euros. Also taxis take credit cards.
On the other hand, it can come in handy to have some cash on you. In case your credit card stops working (for some reason) or you want to throw some coins into the hat of the young music students freezing their fingers off while playing for money in the streets.
It is by the way not common in Iceland to give tips.
Exchanging money
You can exchange some money already in your home country. But be aware that some banks may not have the “exotic” Icelandic krona on stock.
As mentioned above you won't need cash directly upon arrival (taxi or FlyBus to get from the airport to the city centre can be paid by credit card, if you're not picked up anyway). If you want, though, there is a branch of Iceland's National Bank, the Landsbanki, at Keflavik International airport. Its exchange rate is slightly less favourable than at the same bank in town. There are two Landsbanki branches in the airport, one on the first and another one on the second level (departure hall). 'They have quite extended opening hours but are not open 24/7. You can check out the opening hours here: http://corporate.landsbankinn.com/branch-network/leifureirikssonairterminal/
You find a branch of every major Icelandic bank, Landsbanki, Islandsbanki and Arion Banki in the city centre. Opening hours are usually Mo-Sat 9-16h. Exchange rates doesn't differ much between banks.
Icelandic banks don't charge a fee for exchanging money.
For opening hours and current exchange rates check their websites:
http://www.landsbankinn.com/
http://www.islandsbanki.is/english/products-and-services/
http://www.arionbanki.is/english/
Drawing money at ATMs
A far easier way of getting cash is drawing it with your credit or debit card from the numerous ATMs. Check out the fee your bank charges you but the exchange rates are generally better than when exchanging money at the banks. And they are open 24h.
Tax refund
As a foreign visitor make sure you don't miss the opportunity for obtaining tax refund before you leave Iceland again. Since the VAT for most products is 25.5% (some few products like food and books have 7%) you can save a lot of money.
All products worth more than 4.000 ISK (including taxes) that have been bought in a shop with the „tax free“ logo are valid for refund. 4.000 ISK thereby means the total amount on one receipt although the single items may be of lesser value. Upon payment ask for the Iceland Refund Cheque at the cash register since that's what you have to present later. The shop staff will surely help you to fill it out.
Refund applies only for products that leave the country, that's to say those you can actually take with you. Invoices from restaurants, hotels, etc. are not part of the bargain.
You have three months for claiming refund after purchase.
If the refund amount exceeds 5.000 ISK (that's to say the actual value of the products is 34.501 kr or higher) you have to get the products approved by customs (at the airport) before obtaining the refund. In this case make sure to go to the customs desk before checking in, otherwise you will have to take the products with you in your hand luggage. Make sure they are still in its original package.
The refund is payable in cash or to be transferred back on your credit card.
With your tax refund cheque (and if necessary the approval from customs) go to the Islandsbanki desk in the departure hall: http://www.kefairport.is/resources/map-en-2009/vefkort_eng.html