Home Equity Line of Credit - GOOD OR BAD?

Recently I read the good news in the National Post that Canadians were averaging less money owed on their credit cards.  Hurrah I thought - people are finally getting it, they're paying off their credit cards and charging less, reducing debts - yay!  Credit crisis averted!

Then I read the bad news...people weren't really paying off their credit cards, no, instead they were transferring their credit card balances to their Home Equity Line of Credit!! Now, if they'd just stopped there things might not have been so bad because the interest rate on HELOCs is usually much lower than the interest payable on credit cards. BUT, and there's always a BUT isn't there, once people had cleared the balances off their credit cards they just went right back to using them again.  So in reality people's homes, the equity in their homes, was paying for dinners out, tanks of gas, several new outfits and the million other sundry items people regularly put on their credit cards.

I've had a HELOC for the past seven years. It worked really well for me and the interest rate varied from a low of 2.25 % to 3.5%.  I used my HELOC to buy my trailer.  I also used it to buy a car three years ago. The best rate I could get on a car loan was 7.99%.  I NEVER EVER transferred any credit card balances to it or used it for anything foolish. In April I paid off my HELOC and I went to the bank yesterday to close it as well as my chequing account. I now bank only with ING.  What I didn't realize though was that I would have to pay lawyer's fees to have the HELOC discharged. So now I need to somehow squeeze $272.00 out of May's budget which has already been squeezed dry. Perhaps I could put that fee on a credit card hahahahaha!