01 - In a medium saucepan over medium-low heat, combine the softened cream cheese and whole milk. Stir continuously with a whisk or wooden spoon until the mixture is smooth and fully melted, approximately 3 to 4 minutes.
02 - Gradually add the shredded cheddar cheese in handfuls, stirring constantly after each addition until completely melted and the mixture becomes velvety smooth before adding more.
03 - Stir in the garlic powder, onion powder, smoked paprika, black pepper, cayenne pepper if using, and salt. Continue to heat gently for 2 to 3 minutes, stirring frequently to prevent scorching on the bottom of the pan.
04 - Remove the saucepan from heat. Pour the dip into a warm serving bowl and garnish with freshly chopped chives or green onions if desired.
05 - Serve immediately while warm alongside tortilla chips, breadsticks, crackers, or fresh cut vegetables such as celery, carrots, and bell peppers.