There are following main features of credit instruments.
- In Writing:
Credit instruments are only acceptable in written form.
- Unconditional:
Generally, credit instruments are used for the purpose of unconditional receipts and payments.
- Substitute of Money:
The credit instruments can be used in place of money, because they perform the functions of money in business dealings.
- Necessary for Foreign Trade:
Imports and exports depend upon the availability of credit instruments, (e.g.,) in the absence of commercial letter of credit, foreign trade is almost impossible.
- Proof of Debt:
All credit instruments can be presented as a token of legal proof ol debt or claim.
- Reduces Risk and Loss:
Carrying large amounts of cash is risky, but credit instruments have reduced this risk.
- Saves Time and Labour:
Credit instruments save time and labour in settlement of debts not only within the country but also outside the country.
- Facilitates Trade:
Credit instruments facilitate the trade, because people can buy and sell goods without paying cash at the spot. They can pay the amount due after a certain period of time
