Prompt Caching is a powerful feature that optimizes your API usage by allowing resuming from specific prefixes in your prompts. This approach significantly reduces processing time and costs for repetitive tasks or prompts with consistent elements.
Prompt caching with Claude allows developers to store frequently used context between API calls, reducing costs by up to 90% and latency by up to 85%.
At the moment the cached prompts have a lifetime of only 5 minutes.
So unless Cursor gets a special cache lifetime it’s not a huge improvement.
And caching costs 25% more so if you cache unimportant context you might end up paying more than if you didn’t as it expires in 5min.