Unless you plan to use that lettering style a lot, I would cut by hand. Here's a video demonstrating 4 methods:
I disagree a little with the second. Not sure about printers that use liquid ink, but printing that uses dry toner is toxic. I would lay the printout under waxed paper.
AThank you IowaBaker! That's a great video. Just what I need. I don't think I'll need to use that lettering much so doing it by hand is the way to go. I agree with using waxed paper over the print out too :-)