Letter of Credit
Definition
- A written letter that gives authorization to a person or company to draw on a bank or which states that the bank will honour the credit up to the stated amount.
Synonyms
revocable letter of credit, irrevocable letter of credit
Acronyms
L/C
Related Terms and Acronyms
- Cheque (CK) — Acronym,
- A written order for payment of a certain amount of money.
➥ Bank account transaction code. - Credit — Definition,
- Money that a lender gives to a borrower on condition of repayment over a certain period.
- Credit Card (CC) — Acronym, Very Important,
- A plastic card with a coded magnetic stripe that, when signed, entitles its bearer to a revolving line of credit, with a credit limit and interest rate determined by the borrower's income and credit report.
➥ A payment card that gives customers access to a revolving line of credit. - Debit — Definition,
- Another name for withdrawal of funds from your account.
- Documentary Credit — Definition,
- Written undertaking by a bank on behalf of an importer authorizing an exporter to draw drafts on the bank up to a specified amount under specific terms and conditions. They are used to facilitate international trade. In the United States these instruments are called commercial letters of credit.
- Irrevocable — Definition,
- Unalterable.
- Irrevocable Beneficiary — Definition,
- A life insurance or segregated fund beneficiary whose benefit cannot be revoked or modified in any way without his or her consent.
- Loan — Definition,
- Letting another party use something of value temporarily.
- Revolving Letter of Credit (RLC) — Acronym,
