Not sure ehat the issue is here. If the rate permits free cancellation then you won't be charged as long as you cancel by the deadline.
The T&Cs aren't hidden untl you make the reservation. They are displayed duuring the booking process in greater detail as you proceed through before you actually make it..
What matters to you are the T&Cs in the booking for your stay that starts on the 26th. The period in the bottom of the screen shot ends on the 26th i.e. for people staying over Christmas and checking out on the 26th..
Freezing your credit card isn't a good idea. Not only because it stops you using it for other transactions but also the hotel can soon contact your CC and apply any legitimate charges.