Is there any way to set a custom thumbnail for videos? Most of my videos are showing black frames as thumbnails, it looks terrible.

Like it says in your Contributor User Guide’s Video Requirements. 

https://helpx.adobe.com/stock/contributor/help/video-requirements.html

Preview images  

Do: Be aware that your video's preview image will be automatically generated from a frame 5 seconds into the video. 

So that’s where you place your custom Poster Frame for display. 

No. I don’t submit a lot of videos, but I leave 5 second handles at the beginning and end of each as still frames, rather than fading from black.

Unfortunately you can’t choose the thumbnail frame. It is automatically chosen at the 5 second mark.