You can use any type of sharp scissors to make the clips, but spring loaded scissors that open automatically after each cut keep your hands from becoming tired. Most types have handles that your fingers wrap around rather than into, eliminating the holes that can make your fingers sore after many cuts. I use the Heritage snips shown above. They're available from many sources, including Joann. (Buy Direct).
Make clips straight into every seam allowance, spacing them about 1/4" apart and stopping before you reach the seam allowance. Be careful to clip in only one direction at seam intersections. Clipping in two directions in those areas removes chunks of fabric, resulting in gaps along frayed edges.
Make clips in the seams that surround the perimeter of the quilt, taking care to cut in only one direction at each corner.
Wash the Rag QuiltWash the rag quilt in a long wash cycle. I use a delicate cycle because rougher agitation doesn't seam to make the clips fray more. I usually put a bit of soap in the wash, because it seems to help the edges fray. That could be my imagination, so use plain water if you prefer.
Inspect the quilt between the wash and rinse cycles. Did you forget to clip seams? Clip them now, before the rinse. Put the quilt into the dryer when the cycle is finished. Remove when dry and clip away loose threads if necessary.
My washing machine has a lint filter that catches most of the frays. If yours does not, and you plan to make lots of rag quilts, remember that the rinse waters contain lots of strings. Does that harm a septic system? You be the judge of that, but keep in mind that 100% cotton fibers probably do break down fairly quickly.