Letters of credit can be divided into two major types.
They are:

Standby Letters of Credit  - Which act as a
guarantee from a third party bank in the event of
non-payment on the part of the creditor.

and...

Documentary Letters of Credit - Which are typically
used by importers and exporters to transact
business between companies in foreign countries.
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For additional resource information, you may also
wish to review our glossaries which are:

Letter of Credit Glossary

and

International Trade Glossary
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Letters of Credit
Letters of Credit
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