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
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
A letter of credit system that the central bank imposed on importers, an attempt to conserve dollars, had left everything from cars to chicken feed stuck in Egyptian ports.
From New York Times ● Oct. 27, 2022
I bought a letter of credit and took the next ship for Bermuda.
From A Century of Sail and Steam on the Niagara River by Cumberland, Barlow
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.
