Julia Kagan is a financial/consumer journalist and former senior editor, personal finance, of Investopedia. Robert Kelly is managing director of XTS Energy LLC, and has more than three decades of ...

Letters of credit are legal instruments providing a financial guarantee. They assure a beneficiary that payments will be made or nonfinancial obligations performed by a seller or provider. Standby ...

A letter of credit guarantees payment to sellers in international trade. Not all letters of credit are transferable; terms vary. Letters of credit differ from lines of credit, mainly not involving ...

Accounting for a letter of credit on your balance sheet depends on when you use it. One issued by your financial institution acts as a credit substitute. That institution, often a bank, steps into ...