In a saucepan over medium heat, combine the cream cheese and milk, stirring until smooth.

Gradually add the shredded cheddar cheese, continuing to stir until melted and creamy.

Stir in the garlic powder, onion powder, cayenne pepper, salt, and black pepper.

Mix well until all ingredients are fully incorporated.

Remove from heat and transfer to a serving bowl. Serve warm with tortilla chips, veggies, or bread.