As others have said, credit card companies charge fees and small business operators don't want to pay them. It's really a different mindset in Rome - I was just there for a week and never once used a credit card. My ATM card has a high limit so we just withdrew cash as needed (and do let your bank know in advance that you will be using ATM's out of the country) and we paid cash for all our expenses.

Some restaurants take credit cards, but quite a few don't, so check ahead of time when you dine out. Heck, quite a few stores we were in didn't even take credit cards.