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I have already booked one hotel through booking.com. Now I want to book another. I want to keep both of these bookings for now and decide latter which one to cancel. Both of these hotels have Free cancellation period. And I have a long time in my hand. When I booked the second hotel I was prompted whether I want to cancel the previous booking or not.

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If I procced to the next step without cancelling the previous booking will 8,032.89 be deducted from my credit card ?

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If I proceed to the next step without cancelling the previous booking will 8,032.89 be deducted from my credit card ?

No, you still have until Aug 21 to cancel it for free. Even your screenshot says so.

Booking.com reminds you to cancel because people do forget to cancel such Pay Later bookings and then complain that we had to pay extra to Booking.com. You can definitely keep both bookings and cancel within the allowed time limit.

Note: I'm just a frequent user, I don't represent Booking.com in any possible way.

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Whether the money will be charged depends on the conditions of the booking. With some you pay as soon as you book, with some you only pay when you are there and with most it will be some time in between.

It does not matter whether you have one or more bookings for the same night.

At times I make bookings for a group who have different routes and will spend part of the time in the same hotel. In that case I might have bookings for different rooms in one or more hotels, for people with different names or all under my own name and besides the reminder of Booking.com each is as a single booking.

If you have to pay as soon as you book you should get the money refunded when you cancel. But it might be a reason not to book unless it is rather likely that you will use that booking.

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