What is another word for letter of credit?

85 synonyms found


[ lˈɛtəɹ ɒv kɹˈɛdɪt], [ lˈɛtəɹ ɒv kɹˈɛdɪt], [ l_ˈɛ_t_ə_ɹ ɒ_v k_ɹ_ˈɛ_d_ɪ_t]

A Letter of Credit (LC) is a financial document that is used to guarantee payment between a buyer and a seller. Another term for this document is a Documentary Credit and this is a widely used term within international trade. Another possible synonym is a payment guarantee. It dictates the terms and conditions of the transaction and makes sure that the payment is made in a timely and secure manner. Another synonym for LC is a bankers' acceptance. Banks play a crucial role in processing these documents and issuing the payment guarantee, making this term very apt. In essence, these synonyms all refer to the same document and concept of ensuring secure payment between parties in international trade.

How to use "Letter of credit" in context?

A letter of credit is a written promise by a lender to pay a certain amount of money to a borrower, at a certain time, if the terms of the letter are met. The letter of credit may also bear a note from the issuing bank guaranteeing the debt. A Letter of Credit is a negotiable instrument, and can be used in a variety of transactions.

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