Yes, choosing an overselling host is not a good idea unless you have a small / low traffic site. The problem is not the space or bandwidth as such but the CPU, overselling hosts pack their servers with lots of users (this is what overselling is) and attract them by offering unbelievable amounts of space and bandwidth.

What happens is that they then need to only host small low CPU sites (which wont be using all that bandwidth and space anyway) to fit them all on the server.

With a non-oversold server you still have the same issue of CPU but because the amount of users on a server is less the amount of CPU allowed per user is much more plus as you grow there is still space and bandwidth left.

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You should really choose a hosting plan based on your actual needs for space and bandwidth.