What that is for is if someone is NOT reading the notes, but is just playing "accompaniment" chords.
This is VERY normal for music for vocals and guitar. In fact, some music ONLY has the lyrics, and the letter above the point in the lyrics where you switch to play a different chord.
I see this for easy / basic Christmas music. Any singers can follow the lyrics, and a great portion of guitarists, or pianists, can play the chord.
i play guitar (not very well.) When playing regularly, I know, off the top of my head, the chord for many of the most commonly encountered chords: majors, minors, sevenths, and a few more.
So, to play "rhythm," or "accompaniment," to a pop song or a Christmas carol, all I need is the letter (A - G) of the chord.
So, you may also see "Amin," A7" and so on.
With guitar, you think in terms of shapes, or configurations, more than you do in piano/keyboard.
If I hold the "G" shape on a normally tuned guitar, and strum all six strings, all six notes are in the G major chord.
If I move up two frets "higher" with that shape, I have moved two half-steps, and so am now playing an A chord: all six notes played are in the A chord. Up two more frets = B, and up one more fret is C (as in piano, no black key between B and C).
There are a few (well, many) ways to play each chord, but the most recognizable "patterns," or "shapes," are the ones you use in order to be at the lowest fret, with the most "open," un-fretted strings. Playing an "A" chord only requires you to "fret" three strings, but you can strum all 6 of the strings.
Once you learn these seven basic chord shapes, you can play any sheet music, as noted above, by simply seeing the letter of the chord. As long as the music has only major chords.
Also, you know how to "move," in half steps, to higher chords: just scoot that shape up the fret board, fret by fret. At the 12th fret (analogous to chords of 8 white keys and 5 black keys), you hit the same chord again, one octave higher.
Consider: if you then learn the minor chord "shapes," and the 7ths, you know the majority of the chords encountered in most pop songs.