Stenciling on a scrapbook cover--learn from my mistake!

The album I bought for my trip to Michigan had a plain blue cover.

I decided to try to stencil a title on it, so I cut out the letters from vinyl using my Cricut.

Then I used some fabric paint and a sponge dabber (What are these things called?) to apply 2 coats of fabric paint.

I thought I should let the paint dry completely before I took the stencil off, but I was a little anxious, and started pulling the stencil off a bit before that.  As it turns out, I think maybe I should have pulled it off when the paint was still wet.  The paint was stuck to the stencil on the edges.  This picture shows the worst part. 

 I was able to touch it up a bit with a paint brush, but I don't think this paint is going to stay on in the long run.  

See how it kind of rolls up at the edges of the letters?

Has anyone ever tried this successfully?  Did you use a different kind of paint or remove the stencil earlier?  I was pleased that the paint didn't leak under the stencil (I think the smudge in the M is from my fingers as I pulled the stencil off, not from leakage under the stencil.) so I have hopes of making this work in the future.  Any tips from readers would be greatly appreciated :)

Despite the less-than-perfect results, I did cut vinyl with my Cricut to make the stencil, so I'm entering this in the vinyl challenge at Fantabulous Cricut Challenge Blog.