1. Nearly all, if not 100% of legitimate businesses in Rio accept credit cards, always visa/MC and usually American Express.
2. Exceptions, other than illegitimate businesses, are mostly restaurants Anna and Artigiano, two excellent Italian restaurants that take only cash. They are not terribly expensive.
3. Large amounts of cash need to be changed to reais, usually at a worse rate than a credit card will provide or a wire transfer or ATM withdrawal.
4. Credit card fraud does exist but it is not as high in Brazil as in the US, believe it or not.

In sum, carrying lots of cash is unnecessary. Money can be transferred though your bank if you need large amounts, HSBC, Santander and Citibank have easily accessible branches.

However, if you do want to carry large amounts of cash the customs people will probably not notice. If you do it, US$100 in good condition get the least terrible FX rates.