Credit cards are not widely accepted and therefore are difficult to use. Their only use is for room payments at major hotels although some Iranian businesses (e.g., carpet shops) will sometimes accept credit cards on a private basis. Visitors should note that currently MasterCard is the only credit card being accepted by major hotels.
Given the fact that credit cards are rarely accepted in Iran, visitors are advised to bring US dollars in cash form with them. Traveler’s checks are also very hard to convert. Newer notes and larger bills in good condition are easier to exchange and get a better rate than old notes and small bills on the black market. Notes pre-2000 can prove difficult to exchange.
Tourists should avoid currency exchange touts offering to change hard currency at black market rates. These are illegal. Currency should only be changed at authorized offices and banks. All the same, many Iranians themselves use the black market.
Source: Atieh Bahar