Unless your credit card does charges you horrendous fees for foreign currency payments, it's probably the best choice in Chile. Of course some places don't accept credit cards (e.g. Centropuerto bus from SCL into downtown Santiago).
Hotels sometimes charge non-residents (e.g. foreign tourists) in USD because that way they do not need to pay 19% VAT. Credit cards are pretty common in Chile.
ATMs usually charge hefty fees (see separate thread).