letter of credit

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

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

Word History and Origins

Origin of letter of credit¹

First recorded in 1635–45

Example Sentences

A lawyer for James, Dennis Fan, in response called Trump's filing "procedurally improper" and argued Trump has not explained why he can't post his real estate or obtain a letter of credit.

From Salon

The bill would also limit the value of security deposits and letters of credit required for commercial leases.

From Seattle Times

While customers usually pay up front and in dollars, "we had to resort to letters of credit with those buyers from Pakistan", said Muthaura.

From Reuters

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

Go First said the groundings had also driven some lessors to "repossess aircraft, draw down letters of credit and notify further withdrawal of aircraft."

From Reuters