- Just click the gear button on the left-bottom side on the VS code screen
- then Search for "Terminal: clear"
- By default no keyboard shortcut is assigned.
- Just double click the Terminal: Clear
- and give the preferred shortcut of your choice to clear the terminal.
- Usually ctrl+k is used as that shortcut is not assigned with any command.
FYI: This method is the same as @SuRa but is a little simpler.
Btw: I use VS Code version 1.43.0