I am abroad—should I pay in ISK or EUR, and why?

When you shop abroad, the card terminal will often offer you a choice: pay in Icelandic króna (ISK) or in the local currency of the country you are visiting (EUR/USD/GBP/etc.).

If you pay with a card from the old banks, you can expect to pay an extra 2.5% – 3% in currency markups. With us, however, foreign currency conversion costs just 0.7%, meaning you can save a whole lot by using your indó card on your next trip abroad.

But to get the currency at the indó exchange rate, it is crucial that you select the local currency of the country you are in. For example, if you are in Denmark, choose Danish króna (DKK); if you are in Thailand, choose the Baht (THB), and so on.

A Quick Trip to Spain: A Case Study

Let's look at an example where the local currency is the Euro (EUR).

You are strolling through the streets of Madrid and spot a magnificent fridge magnet of a flamenco dancer in full swing—the perfect crowning glory for your fridge back home. The merchant packs it up and points the card terminal toward you. You now have two options:

• Option 1: You choose to pay in EUR The transaction reaches us in Euros, and we convert it to Icelandic króna at the rate we get from VISA. Transparency is close to our hearts in everything we do, so you can always tap the transaction in your history to see exactly what exchange rate you received. You can also always check the current daily rate by tapping here.

  In short: You buy Euros at a much better rate when you choose this route with your indó card.

• Option 2: You choose to pay in ISK In this case, the merchant handles the currency conversion at a rate of their own choosing (Dynamic Currency Conversion). What happens is that the merchant receives the transaction in Euros and converts it into Icelandic króna themselves. Consequently, we receive the transaction already converted, and we don't actually know what the original price in Euros was. These transactions are usually quite expensive, as the merchant can charge as much for the Euro as they please.

  In short: By choosing this route, you are buying Euros directly from the merchant at their rate, not from us.

Online Shopping and ATMs

This rule applies equally to card transactions made abroad and purchases in foreign online stores.

Foreign ATM withdrawals carry a 1.0% markup, but they are still cheaper than what you will find elsewhere. Keep in mind that some foreign ATMs do not give you the option to settle in anything other than ISK. We recommend skipping cash withdrawals at those ATMs and instead looking for ATMs run by certified financial institutions. Traditional bank ATMs are much more likely to offer you the choice to settle the transaction in your currency of preference.