The Usance LC also known as Deferred Payment LC carries with it a predefined and mutually agreed upon contractual credit payment term. The credit term can
vary from deal to deal but is typically defined as a period of 60, 90, 120, or 180 days. It is one of the most popular types of LC and is commonly used when the
importer and exporter already have a healthy working relationship.  

The usance period offers benefits to the importer by providing additional time to sell the goods before the payment is due, which can help in managing cash flow. For the exporter, it offers a firm commitment from the bank that payment will be made after the agreed period, assuming all terms of the letter of credit have been complied with. The bank essentially guarantees payment to the seller, assuming all conditions of the letter of credit have been met, thereby reducing the credit risk associated with the transaction.