Commercial Letter of Credit
This is a direct payment method in which the issuing bank makes the payments to the beneficiary. In contrast, a standby letter of credit is a secondary payment method in which the bank will pay the beneficiary only when the holder cannot.

Revolving Letter of Credit
This sort of letter permits a client to make any range of draws within a certain limit during a specific time period.

Traveler’s Letter of Credit
For those going abroad, this letter will guarantee that issuing banks will honor drafts made at certain foreign banks.

Confirmed Letter of Credit
A confirmed letter of credit includes a bank different than the issuing financial institution guaranteeing the letter of credit. The 2d financial institution is the confirming bank, generally the seller’s bank. The confirming financial institution ensures payment beneath the letter of savings if the holder and the issuing bank default. The issuing bank in international transactions usually requests this arrangement.