Tea bag has the convenience but when it comes to flavor, Loose-Leaf tea is the winner.
Tea bag was an accidental invention. In 1908 a tea merchant from New York City- Thomas Sullivan- sent some tea samples to his clients in small silk bags thinking that they will remove the tea leaves from the bags. but they brewed the tea directly in the the bags and were so happy with the results that they asked for more to be sent in the same packaging!
-Convenience: Tea bag are convenient because they eliminate the need for a strainer, teapot or infuser.
-Quality and flavor: commercial tea bags are filled with smallest pieces of the lowest grade commodity black tea called fannings which is considered unsuitable to be sold loose. They are usually stale since they have more surface area exposed to air. the tea in the tea bag loses much of its essential oils and aromas during processing so they have less complex flavors compared to loose leaf tea. Tea bags are available in round or square sachets which leave little room for tea leaves to infuse. the pyramid tea bags are shaped to provide more space to enable better infusion.
-Cost: A box of tea bag is usually inexpensive but price per cup is similar to loose leaf tea especially when you consider that loose leaf teas could be used for multiple infusions. Tea bags also have a shorter shelf life.
-Environmental: Although some types of tea bags are fully biodegradable, the majority contain small amounts of plastic (polypropylene). Look for bags that are polypropylene-free.
-Convenience: Preparation might require a little bit more effort compared to tea bag. but it is still relatively simple and makes a big difference to the quality of your brewed tea. Special equipment like mesh infuser makes preparing loose leaf tea simple and quick.
-Quality and flavor: Loose leaf has less exposed surface area so stays fresher if stored correctly. Whole leaves still contain most of the essential oils so they keep the complexity of flavors and aromas which will result in full-flavored cup!
Price: Common misconception is that loose leaf tea is more expensive but for the most part is the same price per cup as tea bags and sometimes even lower because of multiple infusions (for example for Oolong teas)
Environmental: Loose leaf teas are biodegradable and break down in soil easily.