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Ingredients
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Cracker dough
Finishing & topping
Method
Cracker dough
Preheat and prepare
Preheat oven to 350°F (175°C). Line two baking sheets with parchment paper or silicone baking mats.
Combine dry ingredients
In a large bowl, whisk together the all-purpose flour, baking powder, salt, paprika, and garlic powder until evenly combined.
Cut in butter and cheese
Add the cold cubed unsalted butter to the flour mixture. Using a pastry cutter, two knives, or your fingertips, cut the butter into the flour until the mixture resembles coarse crumbs with some pea-sized pieces. Stir in the finely grated sharp cheddar and the softened cream cheese until evenly distributed; the mixture will be sandy but cohesive.
Form dough
Add the cold water, one tablespoon at a time, and stir with a spatula until the dough comes together into a firm but pliable ball. If it's dry, add the second tablespoon. Do not overwork. Wrap the dough in plastic wrap and chill in the refrigerator for 20–30 minutes to firm up (this makes rolling easier and keeps crackers flaky).
Rolling, cutting & baking
Cut crackers
Using a sharp knife, pizza wheel, or small square cookie cutter (about 1–1.25 inches), trim edges and cut the dough into uniform squares or desired shapes. Re-roll scraps once as needed. Transfer cut crackers to the prepared baking sheets, spacing them about 1/4 inch apart. Use a fork to dock each cracker lightly (this prevents puffing).
Bake
Bake one sheet at a time on the center rack for 12–16 minutes, rotating the sheet midway, until crackers are golden at the edges and set. Thinner crackers will be crisp at the lower end of time; thicker ones need more time. Keep a close eye during the last 3 minutes to avoid burning.
Cool
Remove crackers to a wire rack and let cool completely. They will crisp further as they cool. Store completely cooled crackers in an airtight container at room temperature for up to 1 week.