You can use credit card literally everywhere in Iceland. Not need to convert cash
I just got back from an 8-day road trip in Iceland
I didn't convert a single dollar to ISK as I didn't use cash even once on my entire trip. I literally paid for everything by credit card even in a small coffee shop in a remote village
Visa and MasterCard are by far the universally accepted card in Iceland. I don't think I've seen much of anything else being accepted here. So make sure you have one of these two cards