A couple of things that aren't mentioned in the other answers are:
1. Linden Labs will still charge you for the maximum amount of land you owned in the previous billing period even after you set your usage to zero on your Dashboard. For example, if your bill date was the 15th of the month, and you abandoned your land on the 16th of the month, you will be charged the full tier for the month.
2. Your account will stay as a Premium account until you reach your next bill date for your membership. You won't be charged when the next membership bill date comes around, but you can still take advantage of the Premium membership until then. This works to your favor if you switch right after you pay the membership fee because you'll still receive the weekly stipend until your account status changes.