Waves,, heya Shiloh ^^
First of all, you gotta understand a few things first. The $295 you are referring to is just the monthly maintenance fees. You are actually charged $1000/$1029 for the initial setup (Undeveloped/themed) through the billing/payment method listed under your account.
With that saying, the same actually applies for your monthly $295. It will actually go according to this order :
1) The US$ balance in your account (either through your own balance or through linden sales).
2) The listed payment/billing method on your account if there is insufficient or no US$ balance in your account.
Hope that helps
http://wiki.secondlife.com/wiki/Linden_Lab_Official:Estate_and_Private_Region_Billing_FAQ
https://community.secondlife.com/t5/English-Knowledge-Base/Buying-Private-Regions/ta-p/700045