Rusted rock chip repair

[jsn]

I tried doing a search but most threads was looking for a good shop to bring it in, or they were wondering how to repair a chip to make it look close to factory paint.

The paint chip I have is probably around 3 to 4 mm in diameter and IS rusted. I didn't notice it before. I don't really care if the touch up paint is noticeable as the area is fairly inconspicuous and I really just want to prevent rust. I've heard a few suggestions like using sand paper to sand off the rust and then using touch up paint, but I'd prefer not to do too much damage to the surrounding paint and make the area bigger.

I've also read through google, that some people suggest using the stuff that converts rust into other compounds, but I tried this stuff on my old mr-2 and am unsure about how effective they are. The area on my old car was much larger, but the rust soon came back. I'm wondering if this stuff will be effective as I'm not sure if the rust has spread under the paint in the area around the chip already, so neutralizing one small area and repainting it, will only slow the process.

Any of you guys dealt with this and do you have any first hand recommendations?

Thanks