Circular letter of credit

A circular letter of credit was a letter of credit issued by a bank or related financial institution to a private person, usually an individual of means, which enabled that person to draw funds from correspondent banks while traveling.

Early examples of the use of personal letters of credit can be found as far back as the Renaissance and they became more standardized by the latter half of the 18th century.

The first being the actual letter addressed to correspondent banks stating the amount of funds that can be drawn.

The second item was a list of correspondent banks in the area where the letter holder expected to be traveling.

Because of the expense involved, most financial institutions had minimum values for which they would issue such letters.