If you've been searching for a web hosting provider, you have probably seen some offers that look very enticing -- at least on the surface.
While 500 gigabytes of space and 2000 gigabytes of bandwidth for $3.95 a month or unlimited space and bandwidth for $6.95 a month may seem reasonable to some people, you should know that nearly all plans like that are marketing ploys meant to entice customers into buying them.
The reason providers can offer such exorbitant limits is due to overselling. The companies know that most customers aren't going to use very much space and bandwidth. For those that do, the company is either large enough to afford it, or it isn't.
You should be on the lookout for those in the latter category. If the company can't afford for you to use all the space and bandwidth you're given, you can count on them having some hidden terms that prevent it.
You may find some sort of clause in their Terms of Service agreement that states that you may only use a certain percentage of your space or bandwidth, or something like that. They won't allow you to get anywhere near the advertised limits before your account is suspended for "abusing" the limits given to you.
You may also notice poor service from hosting providers that are extreme oversellers. Websites and downloads will run very slowly, and you may experience frequent downtime.
The industry hasn't always been like this. Only in the past five or six years has overselling become an issue.
Over the years, the biggest hosting providers have been in constant competition with each other. That has driven the average space and bandwidth limits up exponentially, and made it harder for honest companies to compete.
It is true that hard drive and internet transit prices have gone down significantly, but at nowhere near the rate hosting offerings have gone up.
So, the most important thing to remember is that you should always carefully read the Terms of Service before signing up for any hosting account. Sign up with a reputable company that offers reasonable limits and you'll be much better off than with a disreputable one offering high limits.