How Documentary Credits Work
Revocable or irrevocable?
DCs can be irrevocable or revocable. With a revocable DC, the buyer can change or cancel it after issuance. You should always insist on an irrevocable DC so that it can’t be cancelled without your consent.
An export DC makes it easier to obtain pre-shipment finance in the form of a packing credit, or post-shipment finance where the documents under the DC are negotiated.
Three reasons for HSBC to issue a DC to you
Our trade specialists will ensure that your DCs are as free from discrepancies as possible
We will email or fax a copy of the DC to you for reference
We can hold the DC in safe custody for you
Different types of DC
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Reminder: "To borrow or not to borrow? Borrow only if you can repay!"