You are not 'buying' points. If your cancellation meets your confirmation cancellation policy (the same as a cash pay stay), there will be no penalty.

The cash portion of 'points and money' is not charged to your card until you check out of the hotel. A point purchase will charge your CC at the time you confirm your reservation. (if you cancel a reservation after buying points, your CC is not refunded, but the points you purchased will be credited back to your hhonors account).

The points portion of 'points and money' is deducted from your hhonors account at the time of reservation, but your CC is used to confirm and guarantee the room for the 'cash' portion (again, not charged until check out).