Add the softened cream cheese and mayonnaise to a large mixing bowl. Beat with a hand mixer until smooth and creamy.
Add the shredded cheddar cheese, diced pimento peppers, grated onion, garlic powder, smoked paprika, cayenne pepper, salt, and black pepper.
Mix everything together until the ingredients are evenly combined and the cheese is well coated with the creamy mixture.
For a smoother dip, blend briefly in a food processor until creamy. For a chunkier texture, simply mix by hand and leave some cheddar pieces intact.
Taste the dip and adjust the seasoning by adding more salt, pepper, or cayenne according to your preference and transfer the pimento cheese dip to a serving bowl and refrigerate for at least 30 minutes to allow the flavors to develop.
Serve chilled or let it sit at room temperature for a few minutes before serving with crackers, vegetables, or your favorite snacks.