You can use an external drive but there are some things to keep in mind any time you move files off the SD card. You need to at least save them into different folders on the HD in order to avoid an issue of writing over files with the same name.
I currently use a 5GB external HD to save all files into my computer. I do all of my editing from that drive. My editing software creates proxie files, as mentioned, so speed is not a big issue. I then also use a smaller portable 1TB on the road to save files.
You also want to develop a system of where you are pulling these files from for editing. As mentioned, I always pull them from my 5TB hard drive. If I were to pull them from the 1TB drive and save that edit for later, I'd need to leave those files on that HD and have that HD plugged in at that time. This is why I now always use that same 5TB for all editing on that computer.