Department store and larger restaurants are not a problem. It is the smaller Ma&Pa eateries where cash is needed if you are into the whole culinary culture immersion.

Smaller family owned men's toy store you will get a better price in cash.

My friend and I learnt the hard way that Japanese establishments do not take US cards and the ATMs are also prejudiced against US bank cards. lol

Took a quick night trip to Akihabara from Narita airport and could only use cash the whole time and ran out of cash.
Not used to carrying lots of cash and only had some Japanese yen.
Had to go without dinner since we could not find a place that accepted CC and the ATMs didnt want to give us cash. haha

There is a Citibank ATM at Narita arrival which I make sure to use when I arrive there first thing.

Sometimes, it's really hard to find a US-friendly ATM in the city.

It is? Excluding the post offices and 7-11s and the western banks, maybe so. But there are a lot of post offices and 7-11s and even a few western banks.

Both Visa and Mastercard's websites have an ATM search. If I recall correctly, you can filter for the debit networks i.e. Cirrus and Plus.

I also found that credit card acceptance has gone up, in line with the increase of POS Felica IC acceptance.

For reference for future travelers to Japan, the general rule is post offices, 7-11's Seven Bank, Shinsei Bank, and Citibank take Visa Plus and Mastercard Cirrus. Just want to make this clear for any future readers of this thread.

While many places don't take credit cards places that do take credit cards don't care about where the card is from as long as it works (and you're not obviously doing something illegal with it).

When I was in Japan some years ago, my cards worked OK in the ATMs there, but it was surprisingly difficult to find an ATM. Maybe it's different now, but then, most banks didn't seem to have them, and you couldn't count on finding them in other retail establishments like you often can in US cities. It might be a good idea to take along a list of where they are, if you can find one.

The preceding posts in this thread provide a perfectly simple checklist of locations where you can find ATMs that work with Visa+ and Cirrus ATM cards.

I'm cheating a bit here, re posting from another thread:

Your US ATM card will work just fine.
This is an ongoing issue that is clouded by national boundaries and "operator error".
After having lived in Japan for 16 years and using my (Canadian) ATM and CC a few times a month, I can say that foreign cards work just fine in Japan - WITH A FEW EXCEPTIONS (emphasis due to the ongoing myth that foreign cards NEVER work).
AS covered in this thread, foreign cards work just fine at 7-11. 7-11 is everywhere so that should service the needs of the casual traveler. It is easier to list the banks that foreign cards do not work at - MUFJ. MUFJ is the largest bank in Japan so it may seem like every machine you try doesn't accept foreign cards, but MUFJ only has about 20% of the market.
If you have an ATM card from a European country you are more likely to encounter problems. This has to do with transnational boundaries and something, blah, blah, someone explained this to me once - some sort of way accounts are structured. American and Japanese banking structures are similar - a chequing account translates easily to a chequing account, a savings account translates easily to a savings account. What this comes down to is notifying your home bank that you will be traveling to Japan and you need access to your accounts through an ATM.

Oh, and your card must be on Plus or Cirrus network. Forget anything else.

*CC's are now accepted ALMOST as universally as North America. The average tourist will probably never have a problem. You do need cash for local transit, and small owner operated bars or restaurants - we are talking about places with less than 10 seats or so - and "street" food.

Hear that QSG. Everywhere!
For the OP. Something's missing in my life! http://www.sej.co.jp/shop/index.html

Most convenience stores and cafes don't accept credit cards. A fair number of restaurants don't as well (sit-down restaurants in malls and many places in underground shopping centers)

No it isn't.