Trying to plan ahead so any know if card payments are common at hostels in Cuba or cash is king?
I'd be very cautious about relying on card payments. The reality is that the financial infrastructure for card transactions is not widespread, particularly at private businesses like hostels. The vast majority of these places are not equipped to take cards. The best plan is to bring a good amount of foreign currency, like Euros or Canadian dollars, and exchange them for Cuban pesos upon arrival to use for your hostel payments and other daily expenses.
Don't even bother with cards for your hostel stay. The financial system is not set up for it. I stayed at a few hostels and small hotels in Cuba, and not a single one accepted a card. Even at the main banks, getting cash from an ATM can be a bit of a challenge with a foreign card. You will definitely need to bring US dollars or Euros to exchange.
Cash is absolutely king here. I was just in Havana a couple of months ago and tried to pay with my card at my casa particular, and it was a complete no-go. The place wasn't set up for it, and the owner was very clear that they only accepted cash. My advice is to assume that you will not be able to use your card for hotel. You'll need to go to a bank to get Cuban pesos to pay for your stay.
You're going to want to carry a lot of cash. While the government has been pushing for more digital payments, especially at state-owned businesses and hotels, private hostels (casas particulares) still overwhelmingly prefer cash. You will not find a card machine at most of them. The best plan is to bring Euros or Canadian dollars to exchange for Cuban pesos (CUP) and use that for everything, including your hotel.