请用英语回答,几句就好AlthoughLettersofCreditaremoreexpensivethandocumentarypaymentmethodssuchasD/P,theyareoftenusedininternationaltrade.Explainthereasontheyareused.

Question

请用英语回答,几句就好
Although Letters of Credit are more expensive than documentary payment methods such as D/P,they are often used in international trade.Explain the reason they are used.

Answer 1

firstly,it is a international practice that both transaction should use the L/C to payment for each other.
secondly,L/C is a payment that pay the money to seller both by the bank,which can validly avoid both transaction to break a contract.So the trade procedure is according by Bank credit,these are the reasons why Letters of Credit are so popular in international trade.