I've not tried it myself, but I've heard that using a 'hot knife' to cut the template plastic works a charm! Especially if you can get one with a ball tip. Kind of like a clover iron with a different tip. Place plastic on a wood board so as not to damage underlying surfaces. I've used the xacto knife and was not pleased. I'm still in search of the perfect marking tool. I've got 'em all. Most consistently I use a #2 mechanical pencil. I've had no issues with not getting the pencil marks out of any fabric. I also have - can't remember the brand name - a chalk 'mechanical pencil' type that I picked up at Joanns years ago. Different color chalk 'leads' with a holder. Cheap. With all the colors in the standard set there's almost no color fabric you can't mark and see. And it stays on the fabric for a (relatively) long time during the hand quilting process. The exception, of course, is the border fabric on the quilt I'm currently working on. There's not a color in the rainbow that's not in it and I've yet to find a color marker that will show up!