Nope. Not accusing him of anything fishy without more information. But cash is the first red flag when there is something fishy going on.
A trained businessman would raise all his prices enough to defray the cost of a credit card service. That would raise all his prices from 1% to 3% depending on the percentage of his business that is cash. It only raises all his prices the full amount if all his business is credit card business. The standard varies from business to business. Then he would welcome all customers, make a higher (gross) profit, and not lose business from people like me, who don't deal in cash.
That means that from a hardcore business standpoint, dealing in strictly cash is a straight up bad business decision. A businessman who makes one bad decision at such an elemental level will make others.
From a strictly business point of view, cash has two key attributes: it's anonymous and it's irrevocable. The first means you can't prove you paid, the second means it's done. Taken together they mean no one trusts anyone, and that there are no further promises about the deal in question. That means that that warranty you're holding is worthless unless the seller is having a good day and doesn't have a headache. Cash means your only appeal is to the talk shows.
Credit cards are the exact opposite. Credit cards bring both reputations into play, in a very real way, and give both sides a hard reason to make sure no one is ripped off in any way. Credit is not just based in the concept that a buyer's word is good, it's based in the concept that the word of both parties is good, and that any dissatisfaction in the future will be addressed in good faith.
At the minimum, from a customer's point of view, dealing in cash puts all the power after the sale squarely in the merchant's hands. There's almost always a reason a businessman wants it that way.
Dealing in all cash is choosing to deal without trust, dealing in credit is choosing to deal in trust, demonstrating that you can be trusted and demanding that a seller do the same.
There is an argument that there is a difference between a seller who charges the cost of credit card sales only to credit card customers and a seller who won't take credit cards, although I tend to disagree with that. Such a seller is vastly preferable, however, to a seller who won't take a credit card at all.
Finally, if 3% means you haven't got enough money, look for a knife that is 5% cheaper. (No insult intended, there's a point where everyone, including me, will say "no, that's too much money" for any given knife.)
Oh, and I'm sixty.