In a medium saucepan, combine the half and half and the salt, onion powder, chili powder, and garlic powder. Cook over medium heat, stirring very frequently (constantly near the end), until bubbles form around the edges and it almost boils. Reduce heat to medium-low.

Whisking constantly, add a handful of the chopped American cheese. Stir until the cheese is completely melted, then repeat until all the American cheese has been used.  Repeat with the pepper jack cheese, reserving 1/4 cup. of the cheese for later. When the mixture is completely smooth, remove from heat. Add the chilies and stir until thoroughly incorporated. Transfer to a serving dish, add toppings as desired, and sprinkle with reserved pepper jack cheese.