Letters of credit may also be classified, according to whether the issuing bank may or may not rescind its obligation to the beneficiary. When a bank agrees to honor the drafts of the exporter within a certain period of time the instrument is called an irrevocable letter of credit, while a revocable credit may be canceled at any time by the bank. Letters of credit are frequently transmitted to the beneficiary not directly by the issuing bank, but indirectly through a second notifying bank. If the latter institution adds its guaranty to the obligation of the former, the letter of credit is then said to be confirmed, otherwise it is considered unconfirmed. Banks may therefore give beneficiaries the following kinds of credits: (1) irrevocable by issuer and confirmed by notifier, (2) irrevocable by issuer and unconfirmed by notifier, (3) revocable by issuer and unconfirmed by notifier. A revocable confirmed letter of credit is of course impossible in actual practice, for a notifying bank would under no condition add its confirmation to an instrument which could be nullified by the issuer at will.
Letters of credit may also be grouped according to the currency in which they are issued. Before the war the letter of credit drawn in sterling was the standard instrument of international commerce, but in recent years the dollar credit has been growing in favor, not alone among American merchants, but also with foreign firms.