US cash is the best, most accepted exchange and will get you the most for your money, as well as being the best tender for those who accept it. Win-win deal, overall.
We also use credit cards--and have never seen more than a 2% charge added only occasionally (and we have merchant accounts in the US--that's an acceptable number). As well, the exchange rate is generally slightly better than the two for one rate in cash.
The difference is in the real life value of US dollars to the vendor. It's still the best way to go, if you're concerned about what really turn out to be very small variables.
I do like JRDenver's plastic buckle money belt plan. It keeps things rather discreet and lets you maintain an excellent level of safety. I'm going to find a couple of those for us.