The types of L/C
(1) whether a bill of exchange under a letter of credit is accompanied by a cargo document is divided into:
Documentary letter of credit and letter of credit of light ticket.
Documentary Credit is a letter of credit payable against documentary draft or documentary evidence only. A document here refers to a document representing the ownership of the goods (such as a sea bill of lading, etc.), or a document certifying the delivery of the goods (such as a railway waybill, an air waybill, a parcel receipt).
Clean letter of credit (Clean Credit) is a letter of credit payable on the basis of Clean Draft without shipping documents. A bank's payment by a clean bill of credit may also require the beneficiary to attach some non shipping documents, such as invoices and advances.
In the settlement of international trade, most documentary credits are used.