For the sake of others who come on this issue, I had this same problem in Ubuntu (namely that my passwords weren't caching, despite having set the option correctly, and getting the error git: 'credential-cache' is not a git command.
), until I found out that this feature is only available in Git 1.7.9 and above.
Being on an older distribution of Ubuntu (Natty; I'm a stubborn Gnome 2 user) the version in the repo was git version 1.7.4.1. I used the following PPA to upgrade: https://launchpad.net/~git-core/+archive/ppa