I usually clear the terminal with cmd-k but in VS Code this key combination didn’t work.
I had to use cmd-shift-P and search the Terminal: Clear command.
Turns out I had the cmd-k key combination already set up, but it wasn’t working.
In the keyboard shortcuts screen, the When column was set to terminalFocus && terminalProcessSupported. I set it to just terminalFocus and it worked.
You can also remove terminalFocus to make cmd-k clear the console even if the terminal is not focused, which is nice sometimes.