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.
Although ISL’s 2001 bankruptcy exposed the risk of relying on a single partner, the ATP survived because Miles and Scott had secured a $200 million Swiss letter of credit.
From Los Angeles Times ● Sep. 9, 2026
Twitter was then required to replenish the letter of credit by April 4, a deadline that it missed.
From Washington Times ● Jun. 15, 2023
The letter of credit did not exist, the SEC would later tell a court.
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
My letter of credit on the Paris bankers will put me on easy street financially, so as far as money is concerned, Bobby will know I am all right.
From Molly Brown of Kentucky by Nell Speed
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Get a wordDefinitions 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.
