We present a dichotomy for surface homeomorphisms in the isotopy class of the identity. We show that, in the absence of a degenerate fixed point set, either there exists a uniform bound on the diameter of orbits of non-wandering points for the lifted dynamics in the universal covering space, or the map has non-contractible periodic points. We then use this new tool to characterize the dynamics of area preserving homeomorphisms of the torus without non-contractible periodic points, showing that if the fixed point set is non-degenerate, then either the lifted dynamics is uniformly bounded, or the lifted map has a single strong irrational dynamical direction.