Cursor AI: Complete Guide to the IDE That Changes How You Code

TL;DR

• Cursor = VS Code with AI natively integrated
• Differentiator: multi-file editing with Composer and Agent mode
• Pricing: Free (limited), Pro ($20/mo), Ultra ($200/mo)
• Best for: large refactors, complex projects, end-to-end workflows
• Alternative to: GitHub Copilot, Codeium, but goes beyond

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What is Cursor

Cursor is an IDE (integrated development environment) built on Visual Studio Code, but with artificial intelligence natively integrated into every aspect of the workflow.

It’s not a plugin. It’s not an extension. It’s VS Code reimagined with AI as a first-class citizen.

The key difference

Traditional editor + AI extension	Cursor
AI as add-on	Native AI
Line-by-line autocomplete	Multi-file editing
Chat separate from code	Integrated contextual chat
Works on individual files	Works on the entire project

Cursor uses models like Claude Opus 4, GPT-5, and Gemini 2.5 Pro to provide autocomplete, refactoring, and complete workflows directly in the editor.

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Why It Matters (The Paradigm Shift)

Before: AI as suggestion

With GitHub Copilot or similar extensions:

1. You write code
2. AI suggests the next line
3. You accept or reject
4. Repeat

It works. But it’s incremental.

Now: AI as collaborator

With Cursor:

1. You describe what you want (“add validation to all forms”)
2. Cursor analyzes the entire project
3. Proposes changes across multiple files
4. You review in diff view
5. Apply with one click

It’s not autocomplete. It’s a coding partner.

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Key Features

1. Tab (Smart Autocomplete)

Cursor’s autocomplete predicts your next edit, not just the next word.

What it does:

• Predicts multi-line edits
• Adapts to your coding style
• Learns from your recent changes

Example:

# You type:
def process_user

# Cursor suggests:
def process_user(user_data: dict) -> User:
    """Process raw user data and return User object."""
    validated = validate_user_data(user_data)
    return User(**validated)

It’s not magic: it’s seen your project’s context and knows how you write similar functions.

2. Composer (Multi-File Editing)

The game changer. Composer lets you select multiple files, describe a change, and see all proposed edits in a diff view.

Use cases:

• Refactor a function used in 15 files
• Add logging to all endpoints
• Change an API schema
• Update imports after renaming

How it works:

1. Cmd+I / Ctrl+I to open Composer
2. Select relevant files (or let Cursor find them)
3. Describe the change in natural language
4. Review the diff
5. Apply or adjust

3. Agent Mode

For more complex end-to-end tasks. Agent mode can complete entire flows like “build a registration system with validation, database, and tests.”

Difference from Composer:

• Composer: edits existing files
• Agent: can create new files, run commands, iterate

Important: Always asks for confirmation before applying changes. It’s not blindly autonomous.

4. Contextual Chat

Integrated chat that knows your codebase. You don’t have to copy and paste code.

You: Why is this query slow?
Cursor: [analyzes code] The problem is the JOIN without an index
        on the user_id column. You're also doing SELECT *
        when you only need 3 fields...

5. @ Commands

Quick references in chat:

• @file - Reference a specific file
• @folder - Reference a folder
• @codebase - Search the entire project
• @docs - Query external documentation
• @web - Search the internet

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Pricing (Updated 2026)

Cursor uses a hybrid model: fixed monthly fee + usage credit pool.

Plan	Price	Includes
Hobby	Free	Limits on Tab and Agent
Pro	$20/mo	Unlimited Tab, unlimited Auto, $20 credits/mo
Ultra	$200/mo	~20× Pro’s pool, priority access
Teams	$40/user/mo	Pro + SSO, admin, per-user accounting
Enterprise	Custom	Full control

The credit system

Since June 2025, Cursor uses a “credit pool” system based on actual model API costs:

• Auto mode: Unlimited (uses Cursor’s own models)
• Premium models (Claude Opus, GPT-5): Consumes from the $20 pool
• When exhausted: Switch to Auto or pay overage at API cost

Is Pro worth it?

Yes, if:

• You code more than 2 hours/day
• You work on projects with many files
• You need frequent refactors

No, if:

• You only need basic autocomplete (Copilot is cheaper: $10/mo)
• Small projects without complexity

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Cursor vs The Competition

Feature	Cursor	GitHub Copilot	Codeium
Price	$20/mo	$10/mo	Free*
Autocomplete	✅ Multi-line	✅ Line by line	✅ Line by line
Multi-file editing	✅ Composer	❌	❌
Agent mode	✅	⚠️ Limited	❌
Contextual chat	✅ Entire project	⚠️ Current file	✅
Models	Claude, GPT-5, Gemini	GPT-5	Proprietary

*Codeium is free for individuals, paid for businesses.

When to choose each

Cursor: Large refactors, complex projects, want a “pair programmer” Copilot: Fast autocomplete, GitHub integration, tight budget Codeium: Free, decent autocomplete, don’t need advanced features

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Getting Started (5-Minute Setup)

1. Download and install

1. Go to cursor.com
2. Download for your OS
3. Install (it’s like installing VS Code)

2. Migration from VS Code

Cursor automatically imports:

• Extensions
• Settings
• Keybindings
• Themes

You lose nothing. It’s VS Code with superpowers.

3. Initial configuration

// recommended settings.json
{
  "cursor.cpp.enableAutoComplete": true,
  "cursor.cpp.enableTabComplete": true,
  "editor.inlineSuggest.enabled": true
}

4. First steps

1. Open an existing project
2. Try Tab: write a function and wait for suggestions
3. Try Composer: Cmd+I, select files, request a change
4. Try Chat: Cmd+L and ask something about the code

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Tips to Get the Most Out of It

1. Context is king

The more context you give, the better results:

❌ "Fix the bug"
✅ "The /api/users endpoint returns 500 when the email
    has special characters. The error is in validators.py"

2. Use .cursorrules

Create a .cursorrules file in the project root:

# .cursorrules
- Use strict TypeScript
- Follow hexagonal architecture pattern
- Tests go in __tests__/ next to the file
- Use pnpm, not npm
- Comments in English

Cursor respects these rules in all suggestions.

3. Composer for safe refactors

1. Request the change
2. Review EACH diff before applying
3. Commit after each successful change
4. If something fails, git reset and reformulate

4. Agent for quick prototypes

Agent is ideal for:

• “Create a basic CRUD for products”
• “Add JWT authentication”
• “Set up tests with Vitest”

Not for direct production, but speeds up prototyping significantly.

5. @ Commands for precision

@api/routes.ts Why doesn't this endpoint validate the token?

@folder:src/components Refactor all buttons
                       to use the new design system

@codebase Where is permission logic handled?

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Limitations (What It Doesn’t Do Well)

1. Doesn’t replace understanding the code

Cursor proposes. You decide. If you don’t understand what it suggests, don’t apply it.

2. Can invent APIs

Sometimes it suggests functions or methods that don’t exist. Always verify.

3. Limited context

Although it analyzes the project, it has limits. Very large projects may require you to be more specific about which files to include.

4. Premium model cost

If you use Claude Opus or GPT-5 a lot, you can exhaust the pool quickly. Auto mode is unlimited but less powerful.

5. Not offline

Requires connection. All processing is in the cloud.

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Real Use Cases

Case 1: Codebase migration

“Update all API v1 calls to use v2. Endpoints changed from /api/v1/* to /api/v2/* and now require Authorization header instead of query param token.”

Cursor found 47 affected files, proposed changes, I reviewed and applied in 10 minutes. Manually: 2+ hours.

Case 2: Automatic documentation

“Add JSDoc to all exported functions in src/utils/”

Generated documentation coherent with existing code. Had to adjust 20% of comments, but 80% was good.

Case 3: Assisted debugging

“This test fails intermittently. The error says timeout but the endpoint responds in <100ms normally.”

Cursor identified a race condition in the test setup that I had overlooked for 2 days.

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Conclusion

Cursor isn’t “VS Code with chat.” It’s a new paradigm where AI understands your entire project and can propose coordinated changes across multiple files.

For serious development work, the $20/mo pays for itself in hours saved. For small projects or tight budgets, the free plan + Copilot is still viable.

Best advice: try it. The free plan is enough to evaluate if it fits your workflow.

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