L/C is the abbreviation for Letter of Credit. L/C is a document issued by the buyer’s bank, authorizing the seller to draw a specified sum of money under specified terms, usually upon the receipt by the bank of certain documents (bill of lading and other requested documentation).
L/C is an often-used payment method in foreign trade. L/C is a formal payment method that offers protection to both parties. Buyers placing a large order with a supplier for the first time are especially recommended to use L/C.
T/T means telegraphic transfer, or simply a wire transfer. T/T is a simple payment method.
T/T payment in advance is usually used when samples or small quantity shipments are transported by air, with documents such as air waybills, commercial invoices and packing lists sent to you along with the shipment. As soon as the shipment arrives, you can clear customs and pick up the goods with the documents. However, T/T payment in advance presents risk to the importer if the supplier is not an honest. It is highly advisable to use a safer form of payment, such as escrow, especially if you are trading with a supplier for the first time.