Tag Archives: letter of credit

What is a Letter of Credit and How Does it Work?

letter of credit

Importing and exporting is a complex process for quite a few reasons. One of them is the time involved in shipping overseas. Several months could possibly elapse between the time that a seller’s cargo leaves the seller’s port before it arrives in the buyer’s port for the buyer to pick up.

How is money for the cargo exchanged with this long time lag? The letter of credit.
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