High Credit and Debit Card Fees in Iceland

credit cards Arionbanki

Each transaction made abroad with an Icelandic debit card costs nearly ISK 118 [$0.85, €0.79], RÚV reports. A credit card transaction made abroad can cost nearly ISK 200 [$1.44, €1.34]. The chairman of the Consumers’ Association of Iceland says these transaction fees are much higher than in Denmark, for example, and point to a lack of competition between banks in Iceland.

The figures are from a newly-published report from the Central Bank of Iceland on the cost of fund transfers in the year 2022. That year, a debit transaction within Iceland cost an average of ISK 20, but abroad an average of ISK 118. Within Iceland, credit card transactions cost an average of ISK 51, but abroad they cost an average of ISK 177. For debit cards, that figure includes both the transaction fees and annual fees. Credit cards do not carry transaction fees in Iceland but do have annual fees.

Breki Karlsson, the chairman of the Consumers’ Association of Iceland, says these fees are on the rise. “And in international comparison, they are significantly higher as a proportion of GDP than in Denmark, for example.” Fees for using payment cards abroad are applied in the form of exchange rate surcharges, paid every time a payment card is used at a sales merchant. This surcharge does not apply to debit cards issued by Indó, a newer Icelandic bank. Some card issuers also add a transaction fee on top of the surcharge.