1. : a letter addressed by a banker to a correspondent certifying that a person named therein is entitled to draw on him or his credit up to a certain sum — called also traveler's letter of credit, circular letter of credit, circular note
2. : a letter addressed by a banker to a person to whom credit is given authorizing him to draw on the issuing bank or on a bank in his country up to a certain sum and guaranteeing to accept the drafts if duly made — called also commercial letter of credit, confirmed credit, confirmed letter of credit