Alchemy did not really come about until the High Middle Ages and really peaked in the early modern period; 17th century. Like Astrology, it came to Europe through Arabic sources (via Byzantium) which began to be translated into Latin in the 12th century. This is pretty evident from how a lot of (al)chemical words derive from Arabic. Besides alchemy itself, alcohol, alambic, alkali and elixir for instance are all from Arabic and start with the Arabic definite article al-.

Alchemists were not considered heretics. There was no heresy involved. On the contrary, alchemy was integrated into the largely Aristotelian medieval view of nature, where (as with astrology) the workings of the planets and macrocosmos was also reflected in the microcosmos. (hence the association of substances with planets). In fact, most alchemists came from the ranks of the clergy. Clergy and physicians. Around 1400, several religious orders (e.g the Franciscans) repeatedly banned their members from engaging in alchemy. But the fact that they were obliged to do so betrays that this was likely a fairly common occurrence.

As far as most people were concerned, there was not necessarily anything fundamentally wrong with the philosophical premise of alchemy. But the practice was objectionable. First because nobody had actually seen any one produce any actual gold; but alchemists did become notorious for passing off fake gold, and for getting the wealthy to sponsor their fruitless endeavors. But it was also immoral as it was seen as a vain and greedy pursuit of material wealth, distracting people from the important things in life. Alchemists themselves were very much into a kind of cult of secrecy; viewing themselves as having secret knowledge that only the intelligent and worthy could partake in; virtually all alchemy books contain warnings against sharing the knowledge therein. At the same time their writings were intentionally obscure and difficult (if even possible) to understand. It is not easy to tell the difference between honestly-held beliefs expressed in the convoluted manner they were accustomed to and what you could simply call bullshitting, and there's not necessarily much point in trying to distinguish them, because others believed the bullshit.

This is not to say all alchemists were viewed as charlatans; some were merely fools. But the view of alchemists as charlatans is there in popular culture; for instance in instance Chaucer's Canterbury Tales (c1400, in the Yeoman's Tale), or for a Renaissance example, Ben Jonson's play The Alchemist (1610).

This humorous 16th century woodcut by Pieter Bruegel the Elder is another example: The alchemist sits at his workbench, surrounded by alchemical equipment. His clothes are tattered. He is melting down the family's last coin, it seems, as his wife is standing and demonstratively showing an empty purse. There are overturned crucibles on the floor, a fool is still blowing with bellows at them, jars of chemicals and equipment are lying about everywhere. The household is in disarray, the children are climbing into the cupboard; one child has a cauldron on his head. A man reading is holding out his hand demonstratively 'behold!' and his book explains the topic "ALGHEMIST" - making a pun here on "alchemist" and Middle Dutch "al gemist" - all has been lost. In the upper right we see the consequences of the alchemist's vanity as he is forced to take his family to almshouse, the one child still wearing the cauldron on his head.

So while alchemy was not outright banned for most people (although depending on who you were and where you couldn't necessarily engage in it without permission, as was the case with many activities in the quite regimented medieval society), it was not viewed positively. So one might wonder why anyone would get involved in it in a ignominious and unproductive pursuit? Depending on the person there are various answers; hope of riches and greed were of course a factor. Another is that it was an outlet for intellectual curiosity, and some ultimately useful research was conducted under the guise of alchemy. Finally you have what's probably the same allure as for modern conspiracy theorists; a feeling of being party to privileged secret knowledge. The fact that most people would mock or disbelieve then merely proves the exclusivity of it.