While Iceland can be an expensive travel destination, after three epic trips to the “Land of Fire and Ice,” I’ve found plenty of creative ways to stretch my Iceland travel budget. If you’re interested in planning a trip, here are eight easy ways to save money in Iceland. For even more Iceland travel planning tips, check out my travel guide Iceland: Nature, Nurture and Adventure.
How to Save Money in Iceland
Did you know that you can fly to Iceland for free? If you book any transatlantic flight with Icelandair, you can “stopover” in Iceland at no additional cost for up to seven days. This is a great way to save on airfare and check out multiple destinations.
Like most countries, Iceland is a card-friendly place. While there’s nothing wrong with paying with cash, most people in Iceland pay with either a debit card or credit card. This means you can save money by avoiding fees at currency exchange kiosks and ATMs.
Use your credit card for all purchases and rack up those points and miles. Later redeem them for free flights, seat upgrades, hotel stays, and other travel perks. Just make sure that you’re using a credit card that has no foreign transaction fees.
Lastly, when you get home, pay off your credit card balance in full with your travel fund.
Here’s a short list of my favorite travel credit cards:
- Chase Sapphire Preferred – Earn 60,000 bonus points
- Delta SkyMiles Platinum – Earn 75,000 bonus miles
Read Next: How to Budget for Your Trip
Stock up Duty-Free
Alcohol is expensive in Iceland. Since Iceland taxes alcohol based on the alcohol content, the stronger the spirit, the more it’s going to cost. One way to save money on alcohol in Iceland is to buy drinks during happy hour, but I will share more on that later.
Another way to save money on alcohol in Iceland is to swing by Duty-Free Iceland before you leave the airport. Duty-Free Iceland offers discounted prices on domestic and international spirits. Note that this shop is only located at Keflavík International Airport. One more thing, Duty-Free Iceland limits visitors to six units of alcohol. To figure out the specifics check out this helpful alcohol allowance calculator.
Find Appy Hour
To help you find the best drink deals in Reykjavík, download Appy Hour, a mobile app that lists all the happy hour specials happening throughout Reykjavík. Locations are listed based on proximity and price.
Bring your own water bottle
Another way to save money in Iceland is to bring your own bottle and fill it up with tap water. For one thing, it’s free. Secondly, water in Iceland is drinkable. It is never chemically treated and naturally purified through molten rocks. You might be surprised to find out that bottled water in Iceland is a waste of money because it’s the same water that comes from the tap.
Best water bottles for travelers:
Save money on food in Iceland by shopping for groceries at local grocery stores like Bónus and Krónan. Both stores carry a variety of snacks, drinks, and many other items you might need during your stay. Avoid grocery stores like 10/11 and Kvosin Supermarket which are notoriously more expensive.
Skip the tip
When you eat out in Icleand, skip the tip. Unlike most countries where tipping is the majority of the staff’s earnings, tipping isn’t customary here because the “service charge” found on the bill covers tipping.
Get taxes back
Lastly, after a wonderful trip, Iceland allows visitors to get a portion of their taxes back. If you go shopping in Iceland, before you head out, make sure to claim your tax-free refund at the airport. Since this process is involved, use this Iceland tax-refund guide to help you.
Get My Iceland Travel Guide
Want to plan the perfect trip to Iceland? Check out my Iceland travel guide written for adventurous travelers interested in planning an affordable and culturally enriching trip. Get practical advice on the best things to do, tips for renting a car, best foods to try and more!
Next listen to this episode where I share even more practical tips for saving money in Iceland.
Danielle is a travel finance strategist, author, speaker and podcaster. She paid off $63,000 of student loan debt in 4 years, bought a house at 27 and has traveled to 27 countries and 4 continents. She refuses to let her financial responsibilities hold her back from living life on her own terms.