Yes, I'm backing up to that external USB drive.
I even have 2 external drives, which I use alternately to backup to, I rotate them after each backup.
As I don't need automated backups, I followed your instructions in another post here and changed from regular backups to one time backups (backup once). But now the external USB drive is full, and - as you write - there unfortunately is no way to cleanup old backups.
I switched back to regular backups yesterday.
The capacity is: 120 GB OS disk, and 2 x 1 TB drives (but only 600 GB used at this moment, on all drives). The USB drive has 1.5 TB.