I'm running a site which is mainly visited by Europeans - over 95% of my visitors are from Europe. The site is running for 6 months now and visitors are increasing exponentially. I'm now using a shared host and am running out of bandwidth.

I would now like to move to a dedicated server but am not sure whether to go for a European or an American hosting company.
I'm willing to spend up to $120 for the server. In the US I can get up to 500GB of bandwidth for this price and in Europe it seems to be difficult to get 100GB.

Considering the fact that the site will probably still grow substantially I'm a bit stuck in my choice. When I test US servers I never get a latency below 180ms, mostly even 250ms or more. The site now feels a little sluggish, but this could be caused by the fact that it is a shared host, but it could be the latency as well (probably a combination of the two).

What should I do, go for a fast European connection and probably run out of bandwidth in a year's time, or go for an American host and have a slow feeling connection for my visitors?

Has anyone been in this situation and tried both solutions? Does the latency have a big impact on the visitor's surfing experience or is a 250ms delay not a big deal after all?