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 completely smooth and the cream cheese has fully melted, approximately 3 to 4 minutes.
02 - Gradually add the shredded cheddar cheese in small handfuls, stirring constantly after each addition. Continue stirring until all the cheese has melted and the dip reaches a silky, uniform consistency.
03 - Stir in the garlic powder, onion powder, smoked paprika, black pepper, cayenne pepper if using, and salt. Continue heating gently for 2 to 3 minutes while stirring frequently to prevent the mixture from sticking to the bottom of the pan.
04 - Remove the saucepan from heat. Carefully pour the hot dip into a serving bowl and garnish the top with freshly chopped chives or green onions if desired.
05 - Serve immediately while warm alongside tortilla chips, breadsticks, celery sticks, bell pepper strips, or other cut vegetables of your choice.