I turned on prompt caching for an agent I run all day, watched the next invoice, and the number went up. Not by a rounding error — meaningfully up. This is the write-up of why, because the thing I got wrong is the thing almost every "just add caching" post skips.
The one-sentence version of caching
You send the same long system prompt (plus tool schemas, plus a pasted document) on every call. Without caching you pay full input price to make the model re-read that identical block every single time. Caching stores a prefix of your prompt and, on the next call, charges a fraction to read it back instead of full price.
Sounds free. It is not free. That's the trap.
The part that bit me: writes cost more
