Typically, as a shared hosting customer, you don't really know when you're using to much. You can ask your hosting provider though to tell you if you're getting closer to requiring something more powerful than your current package.
But that of course means giving them an opportunity to upsell, whether you really need to upgrade or not.
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Or upgrading to VPS is enough to handle more traffic?
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An upgrade to a VPS is not necessarily a step up. A small VPS will, even though more expensive in net terms, could give you less in terms of computing power and performance due to overhead, license costs etc. If you're not a server admin you'll have to get a fully managed VPS, which will further increase the price.