Melt the butter in a medium pot over medium-high heat.
Add shallot and garlic and cook, stirring frequently, until softened, a minute or two.
Add flour and cook for 30 seconds, stirring constantly.
Pour in beer and raise heat to high.
Stir in mustard, salt, pepper, paprika, and cayenne.
Bring liquid to a boil, then reduce heat and simmer for about five minutes, until thickened.
Turn off the heat and stir in the cheddar and cream cheese until thoroughly incorporated.
Cool slightly before serving. Dip will thicken up a bit as it cools but will still be a great, dippable consistency at room temperature. If you like, serve it in a small slow cooker or fondue pot