letter of credit
Americannoun
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an order issued by a banker allowing a person named to draw money to a specified amount from correspondents of the issuer.
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an instrument issued by a banker authorizing a person named to make drafts upon the issuer up to an amount specified.
noun
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a letter issued by a bank entitling the bearer to draw funds up to a specified maximum from that bank or its agencies
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a letter addressed by a bank instructing the addressee to allow the person named to draw a specified sum on the credit of the addressor bank
Etymology
Origin of letter of credit
First recorded in 1635–45
Example Sentences
Examples are provided to illustrate real-world usage of words in context. Any opinions expressed do not reflect the views of Dictionary.com.
The lending to the units is backed by a letter of credit from another bank, according to filings in bankruptcy court in Houston.
From The Wall Street Journal • Nov. 19, 2025
In March, to make up for the lost payments, the landlord used a letter of credit deposited by Twitter for $968,000.
From Washington Times • Jun. 15, 2023
Though Intrater and his lawyers repeatedly requested the letter of credit, it never materialized.
From Seattle Times • Jan. 20, 2023
That individual could then travel to any city with a Venetian bank branch and redeem the letter of credit, which could then be spent on trade goods.
From Textbooks • Jan. 1, 2020
His letter of credit troubled his peace of mind and oppressed him with an uneasy sense of wealth.
From A Night on the Borders of the Black Forest by Edwards, Amelia Ann Blanford
Definitions and idiom definitions from Dictionary.com Unabridged, based on the Random House Unabridged Dictionary, © Random House, Inc. 2023
Idioms from The American Heritage® Idioms Dictionary copyright © 2002, 2001, 1995 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company.
