Line two large baking sheets with parchment paper. Set aside.
In a bowl, whisk together the all-purpose flour, baking powder, and salt. Set aside.
In a large mixing bowl or a stand mixer with paddle attachment, beat together the softened butter and cream cheese until smooth and creamy. Sift in the powdered sugar and beat until well combined. Beat in the egg and vanilla extract until all ingredients are incorporated. Scrape the bottom and the sides of the bowl.
Add the dry ingredients and stir using a rubber spatula just until combined and no lumps of flour remain. Cover the dough with a plastic wrap. Refrigerate for at least 1 hour to firm up.
Preheat the oven to 375°F. Prepare the cinnamon sugar coating for the cookies. In a bowl, mix together granulated sugar and cinnamon. Set aside.
Remove the dough from the refrigerator. Scoop the chilled dough and roll into 1 inch sized balls. Roll into cinnamon sugar mixture. Place the cookies on the prepared baking sheet. Repeat with the remaining dough. Arrange cookies on a baking sheet, leaving about 2 inches of space between each cookie. Work in batches.
Bake in the preheated oven for 8-10 minutes or until the edges are set and lightly golden. Remove from the oven and let the cookies cool for 2-3 minutes. Then, transfer to a cooling rack. Enjoy!