It sounds like you are worrying over nothing, as long as you and the rest of your party don't "no show". Based on what you wrote, the hotel is simply trying to make sure (ahead of time, while there is still the possibility of selling the rooms to someone else) that you a) have the credit resources to pay for four rooms and b) that they have valid credit card information to charge you for the first night's stay if you and your party don't make it there. In other words, I don't think the hotel is planning on charging anything to your card until you check out, but they want to reserve (authorize) enough of your credit line so that they will know that the charge will go through when that time does come.

I also assume from what you wrote that you are planning on arriving before the cancellation deadline and thus feel that the hotel is trying to confirm your reservation with a credit card, when there is in fact no requirement in the hotel's reservations terms and conditions for you to do so. That might be so if you were reserving only one or two rooms. But since you are reserving four rooms, I think it is entirely reasonable for the hotel to want to require you to make a confirmed reservation for the four rooms (with a penalty for no showing), not just a "reservation is automatically cancelled if not checked in by" 4 or 6 or whatever time the hotel set.