Upvote:2
This has happened to me twice while using my credit card to book through Booking.com (both times were, coincidentally or not, in Paris). You can either contact the hotel to confirm your reservation or contact Booking.com who will try to work something out with the hotel for you.
As for being charged for cancellation: I don't think you need to worry about that, if you don't do anything your reservation will simply be canceled and you won't be charged.
Upvote:2
Several possibilities with your card issue:
But as for being charged for a cancellation, you have not yet guaranteed the booking and likely Booking.com will automatically cancel your reservation due to lack of your guarantee. They can't charge you for an unconfirmed booking cancellation they make.
Upvote:4
You can use debit or credit cards in the booking.com which is mentioned in their terms and conditions.
https://www.booking.com/content/terms.en-gb.html
Payment is safely processed from your credit/debit card or bank account to the bank account of the accommodation provider through a third party payment processor.
Call your bank to see why they blocked the charge. I am afraid only your bank can sort this out.