When shopping in foreign currency, the amount is converted to Icelandic kronur. The bank's website displays exchange rates for major currencies that can be used to calculate amounts from foreign currencies to Icelandic kronur.
When using a card for purchases, different exchange rates apply depending on whether it's a debit card or a credit card. You cannot use the general exchange rate or cash rate for card transactions. The general exchange rate is used, for example, when transferring money between countries, while the cash rate applies when buying and selling banknotes.
Cardholders are sometimes given the option to pay in Icelandic kronur or foreign currency when shopping abroad. It's important to compare the terms before deciding which currency to choose, but it's usually more economical to shop in foreign currency. When choosing to pay abroad in Icelandic kronur, the merchant determines the exchange rate, and the bank has no involvement.