Frequently Asked Questions

International Finance: General FAQs on International Finance

What prudent credit practices should I follow?

There are a number of prudent credit practices. The common practices are listed below in the order of most secure to least secure:

1. Cash in advance;
2. Documentary letter of credit;
3. Documentary collection or draft;
4. Open account; and
5. Other payment mechanisms, such as consignment sales.

The Export Tutorials section of this website describes each of these practices in greater detail, look for the lessons titled Financing Export Transactions and Methods of Payment.

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