To facilitate future visitors like me (meaning, single traveller who is no stranger to backpacking, and who has been to enough places) to Iceland, I'm writing down some tips that I wish I had known.
Do I need to exchange cash in Icelandic Krona?
In short, no, you don't really need cash.
Iceland is amazingly credit card friendly. All major credit cards ( Visa, MasterCard, American Express, and UnionPay in bigger shops) are welcomed for even a tiny amount of payment. The only occasions i know that require cash payment are local bus ticket on board and flew market. You can buy a one-day bus ticket using credit card though. Considering the depreciating ISK, I prefer credit card when possible.
What's the best/ cheapest transportation between airport and Reykjavik?
The most famous buses are FlyBus by Reykjavik Excursion and Airport Express by Iceland Excursion. However, the less known KExpress has the best price (8 euros or 1300 ISK one way compared to +2000 ISK by FlyBus or Airport Express). Downsides of the KExpress are limited schedule and no hotel drop off.
https://kexpress.is/
Another good option is the special offer by Bus Travel, which includes airport transportation, Blue Lagoon, and Golden Circle, and you could throw in other tours such as Glacier Lagoon. This leads to the next point-
How to pick day tours?
Iceland is not adequately advertised in terms of tourism. But once you are there, the amount of day tours from Reykjavik is overwhelming. Every possible itinerary is offered by a bunch of different companies. Comparing the prices and exact tour details could be fun at first, but definitely tiring after a while.
Price wise, Bus Travel is normally the cheapest. Book online to get discounted online prices. Some say Bus Travel only offers the basics: getting you to the attraction and back. From my own experience with Bus Travel, I actually enjoyed their style very much. They get you to the destination with no fuss; the drivers/ guides provide enough information in a friendly way; they are more flexible compared to bigger companies. For example, the glacier lagoon itinerary has been slightly modified to avoid crowds. And some travelers told me they had a van to themselves from the airport because Bus Travel is not that well known among foreigners.
http://www.bustravel.is/
Is renting a car the only way to explore farther places by myself?
The answer is no, but I didn't know that in advance... The bus company Sterna operates bus services along the island ring road, stopping at every town and villages along the way. If you purchase a bus pass for some route, it is as flexible as driving your own car, well,except that you need to follow a bus time table. For some attractions, day tour from Reykjavik could be long, +5 hours drive one way. So plan ahead and stop at a nearby village for the night.
http://www.sterna.is/en/bus-passport
Sall I book all the accommodations I advance?
Yes. Iceland is too small a country to host so many tourists. Even though Icelanders convert their schools in the summer into hostels, I've still met more than one traveller who couldn't get a place to sleep without reservation. Hostels in Iceland are pretty well managed and suitable for all ages.
Any tips for eating, drinking and shopping?
Be open minded and try local food, such as the famous Icelandic hot dog( I couldn't as a vegetarian). However, the cheapest way is to buy materials from Bónus supermarket and cook yourself.
Iceland, like many other expensive countries, boasts its high quality free tap water. It does taste good. Hot water smells like rotten egg, but you would no longer notice that after several days.
Best placed to shop for traditional sweater is probably Handknitting Association in Reykjavik because of its huge stock of all sizes, colors and designs.
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