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letter of credit

American  

noun

  1. an order issued by a banker allowing a person named to draw money to a specified amount from correspondents of the issuer.

  2. an instrument issued by a banker authorizing a person named to make drafts upon the issuer up to an amount specified.

letter of credit British  

noun

  1. a letter issued by a bank entitling the bearer to draw funds up to a specified maximum from that bank or its agencies

  2. 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

"Collins English Dictionary — Complete & Unabridged" 2012 Digital Edition © William Collins Sons & Co. Ltd. 1979, 1986 © HarperCollins Publishers 1998, 2000, 2003, 2005, 2006, 2007, 2009, 2012

Etymology

Origin of letter of credit

First recorded in 1635–45

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.