Slashing Claude API Bills: Prompt Caching's 90% Cost Advantage

Prompt caching enables developers to reuse processed representations of large system prompts and contexts across multiple API requests, slashing costs by 90% on cache hits—transformative for RAG applications and agents with repetitive workflows. This guide details the pricing mechanics of cache writes versus reads, with worked examples showing how hundreds of daily requests can shift from expensive to sustainable infrastructure spending. For any team serious about optimizing Claude API budgets, mastering prompt caching is no longer optional.