Mix softened butter with garlic powder and smoked paprika in a small bowl until well combined.
Spread the seasoned butter on one side of each bread slice.
Place 4 slices butter-side down on your work surface. Layer with cheddar cheese, Monterey Jack, jalapeño slices, and bacon if using.
Top with remaining bread slices, butter-side up.
Heat a large skillet or griddle over medium-low heat. Cook sandwiches for 3-4 minutes per side, pressing down gently with a spatula, until golden brown and cheese is completely melted.
Remove from heat, let cool for 2 minutes, slice in half, and serve with your favorite chips or a side salad.