traveler's letter of credit

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traveler's letter of credit

A traveler presents a traveler's letter of credit at a foreign bank.

Definition
  1. Noun:
    • A letter of credit issued to a traveler: A financial document, typically issued by a bank, that authorizes the holder to draw funds from the issuing bank's foreign correspondents or agencies while traveling abroad. It functions as a secure form of payment and identification.
Usage
  • This term is used in the context of banking, finance, and international travel. It refers to a specific financial instrument designed for the convenience and security of individuals traveling to foreign countries.
Examples
  • Noun:
    • Before her trip to Europe, she obtained a traveler's letter of credit from her bank to ensure access to funds.
    • The traveler's letter of credit was accepted by major hotels and exchange bureaus throughout the region.
Advanced Usage
  • Historical Context: While largely supplanted by modern instruments like debit/credit cards and ATMs, the traveler's letter of credit was a common and trusted method for carrying funds internationally in the 19th and much of the 20th century.
  • Security Feature: Unlike cash, a traveler's letter of credit could only be used by the person to whom it was issued, often requiring a signature match, which provided protection against theft.
Variants and Related Words
  • Traveler's check (n): A preprinted, fixed-amount check designed for the same purpose as a traveler's letter of credit but in a more standardized form.
  • Letter of credit (n): The broader financial instrument, often used in commercial trade, from which the traveler's version is derived.
Synonyms
  • Circular letter of credit: A less common but synonymous term.
  • Travel credit document: A descriptive synonym.
Related Phrases
  • To issue a traveler's letter of credit: The action of a bank providing this document to a customer.
    • The bank will issue a traveler's letter of credit upon request and verification of funds.
  • To present a traveler's letter of credit: The action of showing the document to draw funds.
    • You must present your passport along with the traveler's letter of credit to receive cash.
traveler's letter of credit

A traveler presents a traveler's letter of credit at a foreign bank.

Noun
  1. a letter of credit given to a traveler

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