A documentary credit is the formal name for a letter of credit: an irrevocable undertaking by a bank, given at the request of a buyer, to pay the seller a stated amount provided the seller presents documents that comply with the terms of the credit. The main entry explains how the instrument works, the parties and the types.
"Documentary credit" is the wording used by the International Chamber of Commerce in its rules, the Uniform Customs and Practice for Documentary Credits, whose current version, UCP 600, has applied since 1 July 2007. The rules simply call the instrument a "credit". Banks, SWIFT message standards and textbooks outside North America tend to follow this usage, while "letter of credit" or "L/C" is more common in everyday commercial speech and in the United States.
The word "documentary" stresses that the bank deals only in documents, not in the goods themselves, and pays against a complying presentation after trade document examination. It separates the commercial credit from a standby letter of credit, which is a default instrument, and from a documentary collection, in which banks handle documents without any undertaking to pay. Changes are made by a documentary credit amendment.