traveller's letter of credit
Noun: A traveller's letter of credit is a specific type of letter of credit issued by a bank to a customer who is traveling. It is a financial instrument that allows the traveler to obtain cash from correspondent banks in other cities or countries, up to a specified total amount, by presenting the letter and providing identification. It functions as a secure and widely accepted form of carrying funds while abroad.
This term is used in the context of banking, finance, and travel. It refers to the physical or electronic document that facilitates access to funds during travel. * The bank issued a traveller's letter of credit to ensure she could access money safely during her world tour. * Before modern credit cards, a traveller's letter of credit was a common way for tourists to manage their finances overseas.
- The term is often used historically, as this instrument has been largely superseded by traveler's checks, international debit/credit cards, and digital banking. It may still be referenced in legal, historical, or specialized financial texts.
- It can be part of discussions on the evolution of payment systems and travel security.
- Traveler's letter of credit: An alternative spelling (American English).
- Letter of credit (LOC): The broader category of financial instruments, of which a traveller's letter of credit is one type. An LOC is a document from a bank guaranteeing that a seller will receive payment from a buyer up to a certain amount.
- Circular letter of credit: A synonymous term sometimes used.
- Traveler's check: A more modern, check-based instrument for similar purposes.
- Circular letter of credit
- Travel credit letter
- Cash
- Personal check (used locally)
- To issue a traveller's letter of credit: The action of the bank providing the document.
- To present a traveller's letter of credit: The action of the traveler showing the document to a correspondent bank to receive funds.
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a letter of credit given to a traveler
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