In a large pot or Dutch oven, cook the bacon slices over medium-high heat until crispy, about 8-10 minutes. Transfer to a paper towel-lined plate and set aside, leaving about 1 tablespoon of the rendered bacon grease in the pot. While bacon cooks, finely mince the garlic cloves and dice the small onion into small, uniform pieces. Cut the cream cheese into 1-inch cubes and shred the cheddar cheese from a block—this ensures both cheeses will melt smoothly into the broth rather than becoming grainy.
Add the butter to the pot with the bacon grease and let it melt over medium heat. Add the diced onion and cook for about 3 minutes, stirring occasionally, until softened and beginning to become translucent. Add the minced garlic and cook for just 20 seconds, stirring constantly, to release its aroma without burning it. I find that brief timing for garlic prevents any bitter flavor that can overpower the delicate creaminess of this soup.
Pour in the chicken broth and stir well to combine with the aromatics. Add the garlic powder, onion powder, dill, chives, bay leaf, smoked paprika, cayenne pepper, and a generous pinch each of salt and pepper. Bring the mixture to a boil over medium-high heat, then reduce to a simmer and cook uncovered for 5 minutes. This simmering time allows the dried herbs and spices to fully bloom and infuse into the broth, building a deeper flavor foundation.
Add the 4 cups of cooked chicken to the simmering broth and cook for 5 minutes to heat through. Then add the cream cheese cubes and shredded cheddar cheese from Step 1, stirring frequently and gently. The cubed cream cheese melts faster than a block, and using freshly shredded cheddar instead of pre-shredded prevents it from becoming clumpy. Continue stirring until the cheeses are completely melted and the soup is creamy and smooth.
Add the fresh spinach to the pot and stir until it wilts completely, about 2 minutes. Pour in the cream and stir to combine, then cook for 1 additional minute. Remove the bay leaf and taste the soup, adjusting salt and pepper as needed. The cream adds richness and rounds out the sharp cheddar flavor, creating that signature 'crack' addictiveness.
Ladle the hot soup into bowls and top each serving with crumbled bacon from Step 1 and thinly sliced fresh scallions. The warm soup will soften the bacon slightly while maintaining some of its crispness, and the scallions add a fresh, bright note that contrasts beautifully with the rich, creamy base.