letter of credit

Definition of "letter of credit"
  1. A guarantee from a bank that it will cover a customer's payment, often used in international transactions
How to use "letter of credit" in a sentence
  1. The exporter agreed to ship the goods upon receiving a letter of credit from the importer's bank.
  2. To ensure the supplier would be paid for their goods, a letter of credit was established.
  3. The construction contract required a letter of credit to guarantee payment for the materials.

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