letter of credit
1
5.5
- noun
- /ˈlɛtər əv ˈkrɛdɪt/
- Formal
:
carta de crédito
- Before shipping the products, the seller requested a letter of credit from the buyer's bank.
But no, I I bid a billion dollars and I put up a letter of credit and I thought I might get it because.
- But no, I I bid a billion dollars and I put up a letter of credit and I thought I might get it because.
Examples
-
Here's the letter of credit for the merchandise.
-
The Society has provided as security a $2,332,000 letter of credit.
Academic text (1998) -
Next, a letter of credit on our Paris bank.
-
The company will contact your supplier and pay them through a letter of credit.
Blog text (18) -
Rabobank International and DNB Bank also provided related letters of credit as part of the project financing.
Blog text (8) -
The sale was to be financed under a letter of credit that had been confirmed for the African customer by Havana Bank International's London office.
Academic text (1994) -
You'll give me an unconditional one-million-dollar letter of credit drawn on a Swiss bank.
-
Surety fund, letter of credit, or insurance purchased by the utility to guarantee that decommissioning costs will be covered even if the utility defaults.
Blog text (5) -
A letter of credit ensures that the seller will receive payment once the conditions are fulfilled.
-
The buyer provided a letter of credit to guarantee payment for the imported goods.
Synonyms
A bank's written promise to pay a seller for goods when required papers arrive
A bank paper that lets a person get money while traveling abroad
How Certain
- Formal
169
3.5
- Formal
1
5.5
- Specialized
1
6.4
- Formal
8
5.1
3
3.4
Surface Forms
Morphology
The phrase combines understandable parts ('letter' = written document; 'credit' = financial trust), so learners can infer it refers to a document related to credit, but the specific legal/banking sense — a bank guarantee of payment under conditions — is a specialized, non-compositional function not predictable from the constituents alone. While many languages have calques (e.g. Spanish 'carta de crédito') that may help some learners, a B1 learner who merely knows the words would likely not grasp the exact conditional-guarantee meaning without exposure.
Etymology
Letter of credit comes from old trade days: a bank would write a letter promising 'credit', meaning a 'promise to pay' the seller for the buyer. That's why today a letter of credit is a bank document that 'guarantees' payment when the sale conditions are met.