traveler's letter of credit
Definition
- 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.
Noun
-
a letter of credit given to a traveler
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