In a large bowl, beat together softened cream cheese and butter until smooth and creamy. Mix in shredded cheddar until fully combined.

Add flour, salt, and garlic powder, stirring until a soft dough forms. If it feels too sticky, add 1 tablespoon of flour at a time until workable. Wrap in plastic wrap and chill for 30 minutes to firm up.

Preheat the oven to 375°F (190°C) and line a baking sheet with parchment paper. Roll the chilled dough into 1-inch balls and place them 2 inches apart. Press your thumb or the back of a teaspoon into the center of each ball to create an indentation.

Spoon about ½ teaspoon of hot pepper jelly into each indentation, being careful not to overfill. Bake for 13–15 minutes, until the bottoms are lightly golden and the edges are crisp.

Cool for a few minutes on the sheet before transferring to a wire rack. Garnish with thyme or parsley if desired. Serve warm or at room temperature.