Most places in Madeira do take cards, but you'll need some cash for buses, and I've heard that some of the cable cars only take cash too (the cable car from the promenade in Funchal does take cards). The small shops and cafes I visited all took cards but it's best to have some money just in case.
Do locals tip in Portugal?
In Portugal, on a regular basis, locals will typically tip taxi drivers and waiters at restaurants (not so much in cafes or bars, although it might happen), regardless if they're at one of the Michelin star restaurants in Lisbon or a family-owned eatery in a village in Alentejo.
Do you tip the hotel front desk?
As for a tip, you don't need to break out your wallet for directions to a nearby coffee shop, says Gottsman. But consider a small gratuity, from $5 to $20, if a front desk person or concierge is able to secure you hard-to-get tickets, reservations or special services.