Too early to transplant?

Not even close. Wait until you see roots coming out of the drain holes - for me that's two weeks from sprout. You have to have roots to hold the soil together when you transplant.

 

I transplant mine when they look something like this.

 

When your two week old plants look like my month old plants

 

I tend to water mine every other day but only with one squeeze of a damp paper towel

 

When theyre that small i usally water them maybe once a week. I completely soak them each time though. As long ss you have good drainage there shouldnt be an issue