USB or Hard Drive: Which is better for File Transferring?

I am running out of disk space in my desktop computer and I am thinking of adding a new hard drive to it. However, I am having a second thought whether to buy a new hard drive or just buy USB drive. Which would be better off? I heard that USBs can hold more files and are faster in transferring files, but hard drives outperforms them in terms of I/O performance.
